Exam 8: Internal Control and Cash

Accompanying the bank statement was a debit memo for bank service charges. What entry is required in the company's accounts?

In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.

Which of the following would be deducted from the balance per books on a bank reconciliation?

Which of the following is not a factor that influences a business's control environment?

Thompson Company gathered the following reconciling information in preparing its October bank reconciliation:? Cash balance per bank, October 31 \ 17,000 Note receivable collected by bank 4,800 Outstanding checks 6,500 Deposits in transit 3,000 Bank service charge 50 NSF check 2,300 Using the above information, determine the cash balance per books (before adjustments) for Thompson Company.

Match each item to a bank statement adjustment, a company books adjustment, or either. -Bank service charge

The following items may appear on a bank statement: 1.NSF check 2.EFT deposit 3.Service charge 4.Bank correction of an error from recording a $300 check as $30? Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account. Use the following format: App ears on the Bank Statement as a Increases (Decreases) the a Debit or Credit Balance of the Company's Item No. Memo Bank Account

Describe the features of a voucher system and list typical supporting documents for a voucher.

A voucher system is an example of an internal control procedure over cash payments.

A necessary element of internal control is

A customer's check received in settlement of an account receivable is considered cash.

Match each item to a bank statement adjustment, a company books adjustment, or either. -A $1,000 note from one of your customers was collected by the bank

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

A backlog in recording transactions is an example of a warning sign from the accounting system.

All bank memos reported on the bank reconciliation require entries in the company's accounts.

Groceries R Us, Inc. reported the following data in its annual report.​Cash and cash equivalents $2,280,000Cash flow from operations (240,000)​Required (a) What is the company's "cash burn" per month? (b) What is the company's ratio of cash to monthly cash expenses? (c) Interpret the ratio you computed in part b. What are the implications for Groceries R Us, Inc.?

Consider the following journal entry made by Jones Company for one day's sales of a single cashier. What might have happened to create this amount of Cash Short and Over difference? Give three possible reasons for this difference.Cash2,235Cash Short and Over100Sales2,135

Match each item to a bank statement adjustment, a company books adjustment, or either. -EFT deposit from a customer

A voucher is usually supported by

Internal control is enhanced by separating the control of a transaction from the record-keeping function.