Exam 8: Internal Control and Cash

Which of the following statements describes an invoice from a supplier?

Banks must return physical copies of the maker's canceled checks.

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account. Cash plus petty cash tickets total the amount allocated to the petty cash fund.

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the journal should be separated.

A petty cash fund was established with a $300 balance. It currently has cash of $73 and petty cash tickets totaling $222 for travel expense. Provide the journal entry to record the replenishment of the fund.

Which of the following describes the environment in internal control?

In reconciling a bank statement, the bank balance is $2,100, and the checkbook balance is $2,001. Which of the following is the most probable reason for the bank balance being larger than the book balance?

A point-of-sale terminal provides control over cash receipts over the counter.

Which of the following is the last step in the daily control over cash receipts by mail?

The payee is the issuer of a check.

Which of the following would be included in the journal to record an NSF check?

A ________ is a document explaining the reasons for the difference between a depositor's Cash account in the ledger and the depositor's cash balance in its bank account.

The following information is needed to reconcile the cash balance for Jackson Lawn Services. * A deposit of $5,800 is in transit. * Outstanding checks total $1,500. * The book balance is $6,800 at February 28, 2017. * The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent. * The bank balance at February 28, 2017 was $18,000. * A deposit of $400 was credited by the bank for $4,000. * A customer's check for $3,700 was returned for nonsufficient funds. * The bank service charge is $60. Based on this information, prepare a bank reconciliation for Jackson Lawn Services as of February 28, 2017.

The cash balance in a company's general ledger and the bank's balance on the bank statement will always be the same.

The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation?

Electronic funds transfer is a system that transfers cash by using paper documents.

The bank charged a service fee of $55. How would this information be included on the bank reconciliation?

A check was written by a business for $549 but was recorded erroneously in the Cash account as $459. How would this error be included on the bank reconciliation?

The following information is available for Jade Company for the month ending June 30, 2017. * Balance as per the bank statement is $12,000. * Balance as per books is $10,100. * Check #506 for $1,100 and check #510 for $700 were not shown on the June 30, bank statement. * A deposit in transit of $1,833 had not been received by the bank when the bank statement was generated. * A bank debit memo indicated an NSF check for $80 written by Jane Smith to Jade Company on June 13. * A bank credit memo indicated a note collected by the bank of $2,000 and interest revenue of $53 on June 20. * The bank statement indicated service charges of $40. What is the adjusted book balance?

A petty cash fund was established with a $600 balance. It currently has cash of $45 and petty cash tickets as shown below: Which of the following would be included in the journal entry to replenish the Petty Cash fund?