FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Reporting and Analyzing Cash,fraud,and Internal Control

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Meng Co.maintains a $300 petty cash fund.On January 31,the fund is replenished.The accumulated receipts on that date represent $80 for office supplies,$160 for merchandise inventory,and $20 for miscellaneous expenses.There is a cash shortage of $8.Based on this information,the amount of cash in the fund before the replenishment is:

A) $300.
B) $260.
C) $40.
D) $48.
E) $32.

F) A) and E)
G) A) and B)

Correct Answer

verified

Show Answer

Question 2

Short Answer

Review LaterAdd Note

Review Later

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of ________.

Correct Answer

verified

establish ...

View Answer

Show Answer

Question 3

Essay

Review LaterAdd Note

Following are seven items a through g that would cause Rembrandt Company's book balance of cash to differ from its bank statement balance of cash. a.A service charge imposed by the bank. b.A check listed as outstanding on the previous period's reconciliation and still outstanding at the end of this month. c.A customer's check returned by the bank is marked "Not Sufficient Funds (NSF)". d.A deposit mailed to the bank on the last day of the current month and not recorded on this month's bank statement. e.A check paid by the bank at its correct $190 amount recorded in error in the company's check register at $109. f.An unrecorded credit memorandum indicating that bank collected a note receivable for Rembrandt Company and deposited the proceeds in the company's account. g.A check written in the current period that is not yet paid or returned by the bank. Indicate where each item,letters a-g,would appear on Rembrandt Company's bank reconciliation by placing its identifying letter in the parentheses in the proper section of the form below.

________ are checks written by the depositor,deducted on the depositor's records,and sent to the payee,but not yet recorded by the bank at the bank statement date.

An internal control system consists of the policies and procedures companies use to protect assets,ensure reliable accounting,promote efficient operations,and uphold company policies.

Spencer Co.decides to establish a petty cash fund with a beginning balance of $200.The company decides that any purchase under $25 can be processed through petty cash instead of the voucher system.The journal entry to record establishing the account is:

Describe the basic bank services that contribute to the control of cash and identify at least two internal control objectives served by the banking activities.

The use of electronic communication to transfer cash from one party to another is called ________.

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794,how should this error be treated on the bank reconciliation?

A company reported net sales for 2014 of $265,000 and $545,000 for 2015.The year-end balances of accounts receivable were $39,000 for 2014 and $92,000 for 2015.Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

Human fraud is driven by the triple-threat of fraud: Opportunity,collusion,and rationalization.

Liquidity refers to a company's ability to pay its long-term obligations.

Outstanding checks,deposits in transit,deductions for bank fees,additions for interest,and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Havermill Co.establishes a $250 petty cash fund on September 1.On September 30,the fund is replenished.The accumulated receipts on that date represent $73 for Office Supplies,$137 for merchandise inventory,and $22 for miscellaneous expenses.The fund has a balance of $18.On October 1,the accountant determines that the fund should be increased by $50.The journal entry to record the increase in the fund balance on October 1 is:

At the end of the day,the cash register's record shows $2,050,but the count of cash in the cash register is $2,058.The correct entry to record the cash sales is:

An invoice is an itemized statement of goods prepared by the customer listing the customer's name,items sold,sales prices,and terms of sale.

A voucher system's control over cash disbursements begins when a company incurs an obligation that will result in eventual payment of cash.

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

Umber Company's bank reconciliation for September is presented below.Prepare the necessary adjusting journal entries based on the reconciliation report.

Albany Co.,which uses a perpetual inventory system,has a $400 petty cash fund.At the end of the first month,the accumulated receipts represent $60 for delivery expenses,$140 for incoming freight charges,$90 for entertainment expense,and $20 for miscellaneous expenses.The fund has a balance of $105.The journal entry to record the reimbursement of the account is: