Exam 7: Fraud, Internal Control, and Cash

The cash records of Barry Company show the following: 1. In September, deposits per the bank statement totaled $38,600; deposits per books $39,000; and deposits in transit at September 30 were $4,600. 2. In September, cash disbursements per books were $36,500; checks clearing the bank were $39,800; and outstanding checks at September 30 were $3,100. There were no bank debit or credit memoranda and no errors were made by either the bank or Barry Company. Answer the following questions: (a) What were the deposits in transit at August 31? (b) What were the outstanding checks at August 31?

The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit.

Which one of the following would not cause a bank to debit a depositor's account?

Control over cash disbursements is improved if major expenditures are paid by check.

If a company deposits all its receipts in the bank and pays all its bills by check, then the monthly bank statement balance will always agree with the company's record of its checking account balance.

The cash account shows a balance of $40,000 before reconciliation. The bank statement does not include a deposit of $9,200 made on the last day of the month. The bank statement shows a collection by the bank of $3,960 and a customer's check for $1,300 was returned because it was NSF. A customer's check for $1,380 was recorded on the books as $1,920, and a check written for $318 was recorded as $390. The correct balance in the cash account was

The principle of internal control that prevents one individual from being responsible for all the related activities of a given task is ______________.

In preparing its bank reconciliation for the month of April 2018, Delano, Inc. has available the following information. What should be the adjusted cash balance at April 30, 2018?

Journal entries are required by the depositor for all of the following except

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

Each of the following items affect the cash balance per books except

Storing cash in a company safe is an application of which internal control principle?

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash with maturities of

Sarbanes Oxley applies to

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Personnel who handle cash receipts should have the option of taking a vacation or not.

The difference between the cash in bank balance shown on the company's books and the cash balance shown on the bank statement may be caused by ______________ and by ______________ in recording transactions by either party.

Macrinez Company assembled the following information in completing its July bank reconciliation: balance per bank $22,920; outstanding checks $4,650; deposits in transit $7,500; NSF check $480; bank service charge $150; cash balance per books $26,400. As a result of this reconciliation, Macrinez will

Management is responsible for establishing a system of internal control.

The principles of internal control activities are used