Exam 4: Internal Control And Cash

Which of the following is not included in Cash and Cash Equivalents on a company's balance sheet?

The best response to an employee caught stealing from the company is to say, "Don't ever let me catch you doing that again!"

An accounting system must be computerized in order to ensure the company has proper internal control.

Match the following terms with their correct definition. -A bank reconciling item that must be subtracted from the unadjusted bank balance when preparing a bank reconciliation

On April 1, a company established a petty cash fund for $300. By the end of the month, the petty cash custodian requested reimbursement of $225 for the following expenditures from the fund: Record the entries to a) establish the petty cash fund; and b) replenish the fund and recognize expenses at the end of April.

A check returned by a bank because the issuer's cash account balance could not cover the check is called a(n)

Internal control systems provide assurance in each of the following areas except

Money market accounts with original maturities of less than 90 days are cash equivalents.

An internal control activity that separates responsibilities so that no one person handles all the tasks for a particular activity is referred to as ____________________.

You are an entrepreneur about to open a coffee and internet cafe near your college campus. You have decided to accept cash and credit and will use college student employees. While you plan to be at the shop during most hours that the business will be open, you have made one of the student employees your assistant manager to manage in your absence. Describe at least five procedures that you might use to provide adequate internal control over cash and credit sales and bank deposits.

The practice of monitoring activities within the internal control system is likely to be carried out by each of the following groups except

Explain how checking accounts, bank statements, and a bank reconciliation are used to help a company control its cash.

On June 30, a company had $1,924 in its cash account according to its general ledger. This included a deposit of $174 that was in transit on June 30th. The June 30th bank statement contained the following information: Assuming outstanding checks of $338, what is the company's adjusted cash balance at June 30th?

An effective system of internal control is critical to protecting a company's investment in cash. Identify the five control activities and provide one example that relates to each control as it would be applied to cash.

The accountant preparing the January bank reconciliation identified the following items: There was also an error in the accounting records whereby a customer's check for $101 was recorded as $110. What is the company's adjusted cash balance at January 31st?

Which internal control activity is followed when inventory storage areas are secured with limited access?

On a bank reconciliation, bank service charges for the month are added to the cash balance per the company records.

The following information relates to the company's November bank reconciliation: -Refer to Dreammaker Kitchens. What is the company's adjusted cash balance on November 30th?

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.) -Monthly statements are mailed to customers to indicate the current balance due.

Checks presented for payment and paid by the bank are known as