C.D. Lee was preparing the monthly bank reconciliation for WhackCo when he noticed the bank made an ...

C.D. Lee was preparing the monthly bank reconciliation for WhackCo when he noticed the bank made an error in the company's favor.
 
  How should the error appear on the bank reconciliation? Discuss the ethical issue of not reporting this error to the bank.
  What will be an ideal response?

---

(Q. 2) A computer abuse technique called a ____ involves a virus that replicates itself on disks, in memory, or across networks.
 a. worm
  b. back door
  c. logic bomb
  d. Trojan horse

---

(Q. 3) Classify each of the items below according to the section of a firm's financial statements where it would be reported. Some sections may be used more than once. Others may not be used at all.
 
  a. Current asset c. Current liability f. Revenue
  b. Long-term asset d. Long-term liability g. Expense
   e. Shareholders' equity
 
  _____ 1. Common stock _____ 6. Accounts payable
  _____ 2. Notes payable (due in 2 years) _____ 7. Land
  _____ 3. Prepaid insurance (2 months remaining) _____ 8. Inventory
  _____ 4. Sales _____ 9. Service fees earned
  _____ 5. Cost of goods sold _____10. Accounts receivable

---

(Q. 4) Checks deposited by the depositor that are not paid because the drawer did not have sufficient funds are called ____________________.
 Fill in the blank(s) with correct word

---

(Q. 5) Daily Grind, Inc. began by selling 15,000 of common stock to its owners in exchange for cash. The effect of this transaction on the accounting equation is:
 
  A) Total shareholders' equity
   Total assets Total liabilities Contributed capital Retained earnings
   15,000 cash No effect No effect 15,000 revenue
 
  B) Total shareholders' equity
   Total assets Total liabilities Contributed capital Retained earnings
   15,000 cash No effect 15,000 common stock No effect
 
  C) Total shareholders' equity
   Total assets Total liabilities Contributed capital Retained earnings
   No effect 15,000 cash 15,000 cash No effect
 
  D) Total shareholders' equity
   Total assets Total liabilities Contributed capital Retained earnings
   15,000 cash 15,000 cash No effect Increase

---

(Q. 6) Multiple-step income statements show
 a. gross profit but not income from operations
  b. neither gross profit nor income from operations
  c. both gross profit and income from operations
  d. income from operations but not gross profit