Exam 4: Internal Control And Cash

During the bank reconciliation process, an accountant identified an error. A check written for $20 to pay a supplier for goods purchased on credit was erroneously recorded in the company's records for $200. Which of the following entries would correct this error?

An amount recorded as an increase in the company's cash account at the end of the period, but which has not yet been reflected on the bank statement is called a(n) ____________________.

Each of the following items is considered a cash equivalent except

Which internal control activity is violated when the cashier at a cash register in a retail store also records the daily receipts in a journal?

Match the following terms with their correct definition. -Fees charged by the bank for checking accounting services

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.) -A mailroom employee opens the mail, counts the money received, and updates the accounting records for the amount received.

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.) -Mathematical extensions and footings on purchase invoices are verified before the invoices are paid.

Which of the assets listed below is considered the most liquid?

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 NSF check returned with the bank statement

On a bank reconciliation, interest earned for the month is added to the cash balance per the company records.

During April, Downtown Iron Works engaged in the following transactions involving it petty cash fund: Prepare the journal entries necessary to record the company's petty cash transactions.

The accountant must make journal entries for all items in the bank section of the bank reconciliation.

Delco Construction The following items relate to the company's March bank reconciliation: -Refer to the information provided for Delco Construction. What is the company's adjusted cash balance at March 31st?

The accounting records for Delta Driving School shows a cash balance of $14,134 on February 28, 2019. On the evening of February 28, company receipts of $1,250 were placed in the bank's night deposit drop box; this deposit was processed by the bank on March 1. The February 28 bank statement shows balance of $18,877, including collection of a $6,000 note receivable plus $55 of interest earned, a service charge of $40, and a $1,550 debit memo for the payment of the company's utility bill. All of the checks that the company had written during January were listed on the bank statement except for check #1908 in the amount of $1,528. ​ A) Prepare a bank reconciliation to calculate the company's adjusted cash balance at February 28, 2019. ​ B) Prepare the journal entries needed to adjust the cash records as a result of the bank reconciliation procedures.

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 unadjusted cash balance according to the company's records May 31st?

A company's bank statement balance shows that there is $4,230 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 $2,880, deposits in transit of $1,280, an NSF check of $160, and a bank service charge of $40. Calculate the adjusted cash balance for this checking account.

Match the following terms with their correct definition. -An account used to record any discrepancies between the cash records and the actual amount of cash received

A check that "bounced" or was returned by the bank due to lack of funds is called a(n) ____________________.

Business process risk assessment is designed to identify, analyze, and manage possible threats to the organization's success concerning ____________________ forces such as resource allocations.

Match the following terms with their correct definition. -Amounts on deposit with financial institutions and investments primarily held in money market accounts, with original maturities of less than 90 days