Exam 7: Fraud, Internal Control, and Cash

A __________________ fund is used to pay relatively small expenditures.

In preparing a bank reconciliation, outstanding checks are

The following adjusting entries for Pare Company were prepared after completing a bank reconciliation. For each of the following adjustments, prepare a probable explanation for the adjusting entry.

Personnel who handle cash receipts should have the option of taking a vacation or not.

The safeguarding of assets is an objective of a company's system of internal control.

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

On October 1, 2014, Herman Company establishes an imprest petty cash fund by issuing a check for $200 to Jill Gray, the custodian of the petty cash fund. On October 31, 2014, Jill Gray submitted the following paid petty cash receipts for replenishment of the petty cash fund when there is $47 cash in the fund: Instructions Prepare the journal entries required to establish the petty cash fund on October 1 and the replenishment of the fund on October 31.

In the month of November, Coler Company wrote checks in the amount of $27,750. In December, checks in the amount of $37,974 were written. In November, $25,404 of these checks were presented to the bank for payment, and $32,649 were presented in December. What is the amount of outstanding checks at the end of December?

The principle of internal control that prevents one individual from being responsible for all the related activities of a given task is ______________.

A debit memorandum could show the collection of a note receivable by the bank.

If a petty cash fund is established in the amount of ₤250, and contains ₤145 in cash and ₤100 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to which of the following accounts?

Gordon Company is unable to reconcile the bank balance at January 31. Gordon's reconciliation is as follows. Instructions (a) Prepare a correct bank reconciliation. (b) Journalize the entries required by the reconciliation.

Which of the following is the correct accounting under GAAP for cash?

At June 30, Mareska Company has the following bank information: cash balance per bank €7,800; outstanding checks €560; deposits in transit €1,100; credit memo for interest €20; bank service charge €40. What is Mareska's adjusted cash balance on June 30?

Two limitations of systems of internal control are the concept of ______________ and the ______________.

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by an employee who has no other responsibilities pertaining to cash.

Mrs. Smith has worked for Grand Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

In the month of May, Jansen Company wrote checks in the amount of $39,100. In the June, checks in the amount of $35,000 were written. In May, $37,000 of these checks were presented to the bank for payment, and $32,000 in June. What is the amount of outstanding checks at the end of June?

Employees who handle cash should be ______________ in order to protect against misappropriation of assets by dishonest employees.