Exam 4: Internal Control And Cash

The following set of items describes activities completed by a company in purchasing and paying for merchandise and in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. (Choices may be used more than once.) -All supporting documents attached to an invoice are canceled when the check is signed.

Each of the following documents is used in the control of cash receipts except

Items that are included on a bank statement and decrease the bank account balance are called ____________________.

The key to being classified as a cash equivalent is that the amount must be available to pay debts within a year's time or less.

Match the following terms with their correct definitions. -Risks associated with how the company allocates its resources to meet its objectives

All of the following would be considered internal control weaknesses except

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list. -Segregation of duties

Collections of accounts receivable are considered to be cash equivalents.

Which of the following documents is used in the control of cash receipts?

While reconciling the checking account, the accountant noticed that an error had been made in recording a check received by the company. The bookkeeper had recorded the receipt as $729 but the correct amount of the check was $279. Which of the following reconciling adjustments is necessary?

Which of the following is not a generally recognized internal control activity?

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 outstanding checks be handled on a bank reconciliation?

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 bank services charges be handled on a bank reconciliation?

Which of the following is a reconciling item on the bank side of a bank reconciliation?

The following set of items describes activities completed by a company in purchasing and paying for merchandise and in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. (Choices may be used more than once.) -Checks are signed by the clerk in the accounting department.

A check written by a company but not yet presented to the bank for payment is called a check in transit.

A Day Spa accepted a check from a customer as payment for services. Unfortunately, the customer's check bounced. The journal entry required on the company's books as a result of this bank reconciliation item will

Which of the following is not a sound internal control procedure for cash disbursements?

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. Determine the company's cash balance before adjustment.

A treasurer preparing the October bank reconciliation identified the following items: What is the company's adjusted cash balance at October 31?