Exam 4: Internal Control And Cash

Which of the following is not a requirement of the Sarbanes-Oxley Act?

The stronger the system of internal control, the higher the accuracy of the company's accounting records and financial reports.

While preparing the February 28th bank reconciliation, the accountant identified the following items: In the process of preparing the reconciliation, the accountant discovered an error in recording a customer's check; the amount was incorrectly recorded on the books as a cash receipt of $600, while the bank correctly recorded the amount as $650. What is the company's adjusted cash balance on February 28th?

Match the following terms with their correct definitions. -Policies and procedures established by top management to help ensure that the company's accounting system and financial statements are as accurate as possible

Which of the following statements is true regarding a credit memo and its relationship to a company's bank reconciliation procedures?

Delco Construction The following items relate to the company's March bank reconciliation: -Refer to Delco Construction. What is the company's unadjusted cash balance in its accounting records at March 31st before the reconciliation was completed?

A company's internal control system must be designed and maintained by its external auditors.

If a company records a $450 receipt as $540, this type of mistake is called a(n) ____________________.

It is important that the petty cash custodian

In a sound system of internal control, cash receipts should be deposited daily.

In anticipation of preparing the July bank reconciliation, the accountant gathered the following information: What is the company's adjusted cash balance at July 31st?

What is meant by the term "cash equivalents"?

Allowing only certain employees to order goods and services on behalf of the company is an example of what internal control activity?

The practices of delaying payments to suppliers, speeding up collection from customers, and earning the greatest possible return on any excess cash are known as ____________________ principles.

Dow Electronics established a petty cash fund in the amount of $250 to pay for small, incidental expenditures incurred at the office. The fund is handled by a trustworthy custodian. At the end of the month, the fund is replenished. On September 30, the petty cash fund contained $13 in cash and the following receipts: Record journal entries to: a) establish the petty cash fund of $250; b) replenish the fund and recognize expenses at the end of September; and c) increase the fund balance to $300.

Match the following terms with their correct definition. -The process of ensuring that the company's accounting records are consistent with the bank's accounting records

The items listed below were identified while preparing a bank reconciliation for the company's checking account as of March 31.Cash balance according to the general ledger -Refer to Dance Town Academy. How will the deposits in transit be handled on a bank reconciliation?

The accounting records for Durden Rentals shows a cash balance of $13,676 on March 31, 2019. On the evening of March 31, company receipts of $3,250 were placed in the bank's night deposit drop box; this deposit was processed by the bank on April 1. The March 31 bank statement shows balance of $9,866, including a service charge of $45, an NSF check from a customer for $210, and a $650 debit memo for the payment of the company's utility bill. All of the checks that the company had written during March were listed on the bank statement except for check #2156 in the amount of $345. ​ Prepare a bank reconciliation to calculate the company's adjusted cash balance at March 31, 2019.

When a bank collects a note on behalf of a company, the bank is likely to issue a debit memo.

Which of the following is a transposition error?