Exam 4: Internal Control And Cash

Which one of the following would never be considered a cash equivalent?

The following information is provided for a company that manufactures bicycles. The factory foreman determines when orders for materials are necessary. The orders are sent to the purchasing department that places orders with the vendors recommended by the factory foreman. When the materials are received, they are immediately delivered to a central storeroom. When invoices are received for the items purchased, they are sent to the accounting department for payment. The accounting department compares the invoices with purchase orders. If the two documents are in agreement, the invoice is approved for payment. The accounting department prepares checks that are signed by the company treasurer. Recommend three or four improvements in the company's procedures for purchasing and paying for purchases of materials that will provide better internal control.

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the bank statement?

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

While preparing a bank reconciliation, which of the following items would be added to the bank statement balance?

The accountant for a local manufacturing company is reconciling the company’s bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.) -Check written on the company's account in May that does not appear on the bank statement

The accountant for a local manufacturing company is reconciling the company’s bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.) -Customer's check was deposited on May 31 but is not included on the bank statement

The sole purpose for creating an internal control system is to deter embezzlement.

The following information relates to the company's May bank reconciliation: In addition, a check was recorded in the accounting records as $1,200 but the correct amount as recorded by the bank was only $1,000. -Refer to Designs on You. What is the net amount of the adjustments to the company's cash balance as a result of the bank reconciliation process?

The accountant for a local manufacturing company is reconciling the company’s bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.) -Bank service charge on the bank statement for new checks

A company's bank statement balance shows that there is $4,190 in the checking account at the end of the month. Comparing the company's records with the bank statement reveals several additional items, such as outstanding checks of $1,860, deposits in transit of $2,080, an NSF check of $209, interest earned of $21.52, a bank service charge of $40, and a check for $120 recorded twice by the company. Calculate the adjusted cash balance for this checking account.

The operating cycle is the elapsed time between the

Match the following terms with their correct definition. -An amount received and recorded by the business but not yet recorded by the bank

A debit memo appeared on the May bank statement. How should this amount be treated on the May bank reconciliation?

The following information relates to the company's November bank reconciliation: -Refer to Dreammaker Kitchens. As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books?

Strategic risk assessment is primarily concerned with

The following information relates to the company's November bank reconciliation: -Refer to Dreammaker Kitchens. What was the company's unadjusted cash balance on November 30th before the bank reconciliation process was undertaken?

What adjustments are often necessary after the reconciliation of a bank account?

As part of a sound system of internal controls, all disbursements (with the exception of petty cash) should be made by check.

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.) -Cash register tapes are recorded daily by an employee from the accounting department.