Exam 7: Fraud, Internal Control, and Cash

The difference between the cash in bank balance shown on the company's books and the cash balance shown on the bank statement may be caused by ______________ and by ______________ in recording transactions by either party.

If employees are bonded

A deposit made by a company will appear on the bank statement as a

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Identify which of the following reconciling items would require an adjusting entry to be made by Danielle Doyle Company. 1. Deposits in transit totaled $2,000. 2. A check written to the company for $415 by Cartography Company was returned NSF. 3. The bank charged the company $25 for printing checks. 4. Outstanding checks totaled $3,300 5. A debit memorandum reported an EFT of $178 to Salome Utilities

In a voucher system, vouchers are prepared in the accounts receivable department.

Identify the three activities that pertain to a petty cash fund, and indicate an internal control principle that is applicable to each activity. (b) When are journal entries required in the operation of a petty cash fund?

Listed below are items that may be useful in preparing the March 2018, bank reconciliation for Walker Machine Works. Using the following code, insert in the space before each item the letter where the amount would be located or otherwise treated in the bank reconciliation process.

On April 30, the bank reconciliation of Baxter Company shows three outstanding checks: no. 354, $650, no. 355, $820, and no. 357, $615. The May bank statement and the May cash payments journal show the following. Instructions Using step 2 in the reconciliation procedure, list the outstanding checks at May 31.

A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $93. The entry to replenish the fund would

Companies that are subject to, but fail to comply with, the Foreign Corrupt Practices Act of 1977

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

If a check correctly written and paid by the bank for $584 is incorrectly recorded on the company's books for $548, the appropriate treatment on the bank reconciliation would be to

Control over cash disbursements is generally more effective when

Candy Claws Company gathered the following reconciling information in preparing its August bank reconciliation: Cash balance per books, 8/31 \ 19,500 Deposits in transit 900 Notes receivable and interest collected by bank 4,800 Bank charge for check printing 120 Outstanding checks 12,000 NSF check 1,020 The adjusted cash balance per books on August 31 is

A petty cash fund should not be used for

Internal control over cash disbursements is more effective when payments are made by ______________, rather than by ______________.

If a company deposits all its receipts in the bank and pays all its bills by check, then the monthly bank statement balance will always agree with the company's record of its checking account balance.

Which of the following would not be reported on the balance sheet as a cash equivalent?