Exam 7: Fraud, Internal Control, and Cash

A debit memorandum would not be issued by the bank for

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.

A check correctly written for $270 was incorrectly entered in the cash payments journal for $720. In preparing a bank reconciliation, $_____________ must be ______________ the cash balance per ______________.

Compensating balances are a restriction on the use of a company's cash and should be

When making a payment from the petty cash fund for postage stamps, the following journal entry is made.

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?

Joe is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

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?

A petty cash fund is generally established in order to

Petty cash funds are not included in the cash balance reported on the statement of financial position.

Identify the internal control procedures applicable to cash disbursements followed by Downey Company in each of the following cases. 1. Company checks are prenumbered. 2. Only the treasurer is authorized to sign checks. 3. All employees are required to take vacations. 4. Blank checks are stored in a locked safe. 5. The bookkeeper, not the treasurer, records cash disbursements.

Tang Company assembled the following information in completing its June bank reconciliation: balance per bank HK$42,920; outstanding checks HK$24,650; deposits in transit HK$27,500; NSF check HK$4,480; bank service charge HK$170; cash balance per books HK$50,420. As a result of this reconciliation, Tang will

Cash equivalents, such as highly liquid investments that can be converted into a specific amount of cash, are currently reported with cash on the statement of financial position.

If the month-end bank statement shows a balance of ¥720,000, outstanding checks are ¥240,000, a deposit of ¥80,000 was in transit at month end, and a check for ¥10,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

A remittance advice attached to a company check provides

If a petty cash fund is established in the amount of $200, and contains $118 in cash and $85 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to which of the following accounts?

The daily cash count of cash register receipts made by department supervisors is an example of

A compensating balance is included in the amount of cash reported on the statement of financial position.

Reconciling the bank statement monthly is an example of

The custodian of a company asset should