Exam 7: Fraud, Internal Control, and Cash

In the month of May, Grimm Company .wrote checks in the amount of $92,500. In June, checks in the amount of $126,580 were written. In May, $84,680 of these checks were presented to the bank for payment, and $108,830 in June. What is the amount of outstanding checks at the end of June?

The principles of internal control include all of the following except

The most important element of the fraud triangle is rationalization.

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

A debit memorandum issued by the bank ______________ the cash balance in the depositor's account.

The petty cash fund of CHF200 for the Hansen Company appeared as follows on July 31, 2014: On July 31, the office manager gives instruction to increase the petty cash fund to CHF300. The journal entry to replenish the petty cash fund would include a

Moyer Instruments is a rapidly growing manufacturer of medical devices. As a result of its growth, the company's management recently modified several of its procedures and practices to improve internal control. Some employees are upset with the changes. They have complained that all these changes just show that the company no longer trusts them. Required: "Internal controls exist because most people can't be trusted." Is this true? Explain.

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Internal control systems must be monitored periodically for their adequacy.

If the month-end bank statement shows a balance of $90,000, outstanding checks are $30,000, a deposit of $10,000 was in transit at month end, and a check for $1,250 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

A $100 petty cash fund has cash of $17 and receipts of $82. The journal entry to replenish the account would include a

A bank may issue a credit memorandum for

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

The ______________ of an asset should not have access to the accounting records of that asset.

At April 30, Mareska Company has the following bank information: cash balance per bank €6,100; outstanding checks €280; deposits in transit €550; credit memo for interest €10; bank service charge €20. What is Mareska's adjusted cash balance on April 30?

Blank checks

Hemingway Company uses an imprest petty cash system. The fund was established on March 1 with a balance of $200. During March the following petty cash receipts were found in the petty cash box. The fund was replenished on March 15 when the fund contained $8 in cash. On March 20, the amount in the fund was increased to $300. Instructions Journalize the entries in March that pertain to the operation of the petty cash fund.

In preparing a bank reconciliation, outstanding checks are

Storing cash in a company safe is an application of which internal control principle?

Internal control is most effective when several people are responsible for a given task.