Question

The shareholders can vote to pay themselves a dividend." True False Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders." True False Which of the following is NOT a principle of internal control? Responsibilities should be clearly established Adequate records should be maintained Responsibility for related transactions should be divided Assets should be insured and employees bonded Audits should always be conducted by employees internal to the organization A cheque that was outstanding on last month's bank reconciliation was not among the cancelled cheques returned by the bank this month. As a result, in preparing this month's reconciliation, the amount of this cheque should be Added to the book balance of cash Deducted from the book balance of cash Added to the bank balance of cash Deducted from the bank balance of cash Noted as a memo During the current year, TechCom concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assuming the allowance method is used to account for bad debts? No effect on net income or on total assets Decrease in net income; no effect on total assets Decrease in net income, decrease in total assets Increase in net income; no effect on total assets No effect on net income: decrease in total assets

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY on the first four questions should be answered. Kindly take note of it.

Part 1

False

Shareholders cannot vote to pay themselves a dividend. They cannot approve dividend payments

Part 2

True

In case of cumulative preferred shares all prior and current dividends are paid to preferred shareholders before paying any dividend to common stockholders

Part 3

Option E

Audits should always be conducted by employees internal to the organization.

For auditing the internal control, the external services may be hired of bias review.

Part 4

Option D

Deducted from the bank balance of cash

As it is a bank transactions, it should be deducted from the bank balance of cash book or statement.