Exam 7: Internal Control and Cash

Jules Company requires a petty cash balance of $250. The company's accountant provided you with the following information regarding payments made from the petty cash fund for the month of January. Office\nobreakspaceExpenses: January 5 Purchase cream and sugar for coffee station \ 63.00 January 11 Purchased floral arrangement for front office reception area 95.00 Delivery Expense January 18 Marketing proposal sent by express courier to client 36.00 Transportation- In January 26 Paid shipping bill for merchandise inventory purchased by Jules 43.00 You inspect the petty cash box and find it has $3 left. -Prepare the Petty Cash Payments Report for January.

Identify how each of the following items would be treated on a bank reconciliation by entering one of the following codes in the space provided. B+ Bark balance increased B- Bark balance decreased G+ General ledger (book) balance increased G- General ledger (book) balane decreased NE No effect on the bark reconciliation 1. Outstarding cheques. 2. Deposits in trarsit. 3. Cheque #32, subtracted from the bark balarce on last month's bark reconciliation, was retumned with this month's statement. 4. Included with the bark statement was a debit meno for bark service charges. 5. Cash receipts placed in the barik's night depository after bariking hours were not included on the bark statement prepared on the sarne date. 6. Cheque #47 was writtern and recorded by the bark as $\$ 753$ . The business recorded the cheque as $\$ 735$ . 7. A cheque listed as outstanding on last month's bark reconciliation was not retumed with the curtent month's carcelled cheques. 8. A deposit listed as outstarding on last month's bark reconciliation appeared as a deposit on the c.rrent month's bark statement. 9. A creditmemo enclosed with the bark statement shows that the bark collected a rote on behalf of the accourtholder. 10. A debit meno enclosed with the bark statement shows that the bark paid a note on behalf of the accourtholder.

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques, deposits, and bank service charges to the bank balance.

Bonding does not discourage loss from theft because employees know that bonding is an insurance policy against loss from theft.

Policies and procedures used to promote efficient company operations are known as

Prenumbered printed cheques are an example of which internal control principle?

The use of internal controls provides guaranteed protection against losses due to operating activities.

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

Ten days ago, a company established a $90 petty cash fund. Today, October 5, the petty cash box contains $3 in cash and the following paid petty cash receipts: transportation-in, $14.25; postage, $34.50; and office supplies, $36. Prepare the general journal entry to reimburse the fund and to increase its size to $150.

Cash receipts are the result of

A properly designed internal control system is a key part of systems design, analysis, and performance.

Z-Mart's current assets were $17,980. Its quick assets were $11,420. Its current liabilities were $12,190. Its quick ratio is

Cash consists of

On September 1, Bartoletti Company established a petty cash fund for $100. On September 10, the petty cash fund was replenished when there was $16.50 on hand and there were petty cash receipts for office supplies, $27; transportation-in, $32; and postage, $21.50. On September 15, the petty cash fund was increased to $125. Record these transactions in general journal format.

Identify each of the following items as either (a) cash or (b) cash equivalent._____ 1. Coins _____ 2. Petty cash _____ 3. Three-month certificate of deposit _____ 4. Currency _____ 5. Certified cheque _____ 6. Cashier's cheque _____ 7. Loose change in a coffee tin _____ 8. Money orders

A bank issues a debit memorandum

What is the purpose of the petty cash account?

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit to Accounts Receivable.

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.