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

On March 1,a company established a $75 petty cash fund.On March 12,the petty cash fund contains $3 in cash and the following paid petty cash receipts: transportation-in on merchandise inventory $14.25; postage,$19.50; and office supplies,$36.Give the general journal entry to reimburse the fund and to increase its amount to $150 on March 12.

After preparing a bank reconciliation,adjustments must be made for items reconciling the book balance.

A purchase order is a document the purchasing department sends to the vendor to place an order.

Clayborn Company' bank reconciliation as of May 31 is shown below. One of the adjusting journal entries that Clayborn must record as a result of the bank reconciliation includes:

Internal control systems are subject to limitations that usually arise from either (1)human error or human fraud,or (2)the cost-benefit principle.

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

The voucher system of control:

A ________ fund is used to make cash disbursements of small amounts to avoid the time and cost of writing checks.

Which of the following is not one of the policies and procedures that make up an internal control system?

The number of days' sales uncollected is used to:

When evaluating the days' sales uncollected ratio,generally the higher the receivables balance,the better the ratio.

When a voucher system is used,an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Basic bank services such as bank accounts,bank deposits,and checking contribute to the control of cash.

Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check.Ryan's June bank statement shows $18,361 on deposit in the bank.Ryan's comparison of the bank statement to its cash account revealed the following: Additionally,a $29 check correctly written and recorded by the company was recorded by the bank as a $92 deduction. The adjusted cash balance per the bank records should be:

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

An ________ refers to the policies and procedures managers use to protect assets,ensure reliable accounting,promote efficient operations,and urge adherence to company policies.

The document prepared by the vendor that is an itemized statement of goods listing the customer's name,items sold,sales prices,and terms of the sale is the ________.

Assigning purchasing,receiving,and paying for merchandise to one department or individual is a way to streamline a voucher system.

The ________ account is used to record the effects of cash overages and shortages from errors in making change or managing a petty cash fund.

Since petty cash is concerned with such small amounts of cash,it is not necessary to document all transactions with a petty cash receipt.