FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 4: Cash and Internal Controls

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Short Answer

Review LaterAdd Note

Review Later

During the current year,a company provides services on account for $100,000.By the end of the year,$60,000 of this amount had been received.In addition,cash payments for the year were employees' salaries,$50,000;office supplies,$10,000;and utilities $20,000.Determine the amount of operating cash flows the company will report in the current year.

Correct Answer

verified

Show Answer

Question 72

True/False

Review LaterAdd Note

Review Later

Separation of duties occurs when two or more people act in coordination to circumvent internal controls.

A) True
B) False

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

Giving only management the right to make purchases over a certain amount is an example of which preventive control?

The petty cash fund represents cash on hand and is used to pay for minor purchases.

Checks outstanding are checks the company has written that have not been subtracted from the bank's record of the company's balance.

A company's bank statement shows a cash balance of $4,230.Comparing the company's cash records with the monthly bank statement reveals several additional cash transactions such as checks outstanding of $3,880,deposits outstanding of $1,230,NSF check of $300,and service fee of $50.Calculate the correct balance of cash.

Listed below are five terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Allows users to purchase items without having to pay cash immediately.

Which of the following is NOT correct regarding the reporting of cash?

Only transactions involving cash affect a company's cash flows.

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Receive payment from customers.

After preparing the bank reconciliation,an NSF check would result in which of the following when recording the adjustment to the company's cash balance?

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Pay salaries to employees.

The three elements of the fraud triangle are:

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ PCAOB establishes standards related to the preparation of audited financial reports.

Management needs to monitor the internal control system,just like any other system.Any control deficiencies spotted by employees should be reported immediately to management.

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Pay dividends to stockholders.

Describe the procedures used to reconcile a company's cash balance.

When customers pay for services with a check,the company should debit Accounts Receivable and credit Service Revenue.

A company uses the following process for its cash receipts.At the end of each day,the secretary places all cash and checks received from customers in a desk drawer.Each Monday,the secretary totals all amounts received,records this in the accounting records,and deposits the money in the bank account.Then,once every three months,the office manager requests information from the bank necessary to prepare a bank reconciliation.Discuss the company's internal control procedures related to cash receipts.

Common types of financial statement fraud include creating fictitious revenues from a fake customer,improperly valuing assets,and mismatching revenues and expenses.