Exam 7: Fraud, Internal Control, and Cash

If a check correctly written and paid by the bank for $427 is incorrectly recorded on the company's books for $472, the appropriate treatment on the bank reconciliation would be to

Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,550; deposits in transit $2,500; NSF check $160; bank service charge $50; cash balance per books $8,800. As a result of this reconciliation, Carothers will

Which of the following is not one of the main factors that contribute to fraudulent activity?

GAAP's accounting and internal control procedures related to cash and the definition of cash equivalents, as compared to IFRS are: A) essentially similar essentially similar B) essentially different essentially similar C) essentially similar essentially different D) essentially different essentially different IFRS

A bank reconciliation should be prepared

The use of remittance advices for mail receipts is an example of

In large companies, the independent internal verification procedure is often assigned to

Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency.

For efficiency of operations and better control over cash, a company should maintain only one bank account.

If a check correctly written and paid by the bank for $584 is incorrectly recorded on the company's books for $548, the appropriate treatment on the bank reconciliation would be to

Rebekah Grace has worked for Specoly Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

All of the following would involve a debit memorandum except

Reconciling the bank statement monthly is an example of

Management is responsible for establishing a system of internal control.

Internal controls are concerned with

On a bank reconciliation, deposits in transit are

Internal control is most effective when several people are responsible for a given task.

Companies that are subject to, but fail to comply with, the Foreign Corrupt Practices Act of 1977

Control over cash disbursements is generally more effective when