Exam 7: Fraud, Internal Control, and Cash

Russel Company assembled the following information in completing its March bank reconciliation: Balance per bank \ 11,460 Outstanding checks \ 2,325 Deposits in transit \ 3,750 NSF check \ 240 Bank service charge \ 75 Cash balance per books \ 13,200 As a result of this reconciliation, Russel will

The entry to replenish a petty cash fund includes a credit to

At August 31 Kiner Company has this bank information: cash balance per bank $9,450; outstanding checks $762; deposits in transit $1,700; and a bank service charge $20. Determine the adjusted cash balance per bank at August 31, 2014.

The safeguarding of assets is an objective of a company's system of internal control.

Shatner Company has budgeted sales revenue as follows: Past experience has indicated that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale, 30% in the month following the sale, and 5% in the second month following the sale. The other 5% is uncollectible. Instructions Prepare a schedule which shows expected cash receipts from sales for the months of April, May, and June.

The cash records of Grayson Company show the following:1. In February, deposits per the bank statement totaled $37,700; deposits per books $38,000; and deposits in transit at February 28 were $3,550. 2. In February cash disbursements per books were $37,500; checks clearing the bank were $37,300; and outstanding checks at February 28 were $2,500. There were no bank debit or credit memoranda and no errors were made by either the bank or Grayson Company. Answer the following questions: (a) What were the deposits in transit at January 31? (b) What were the outstanding checks at January 31?

Sam's Grocery Store has the following policy. 'Only one cashier can have access to a cash drawer.' Which internal control principle supports this policy?

One example of a periodic independent verification is the bank reconciliation.

GAAP's, accounting and internal control procedures related to cash and the definition of cash equivalents, as compared to IFRS are:

Which of the following is not a basic principle of cash management?

Indicate whether each of the business practices listed below strengthens (S) or weakens (W) a company's system of internal control. ____ a. Cashiers are not bonded. ____ b. All payments are made with checks. ____ c. Discouraging employees from taking paid vacations. ____ d. Two people handle cash sales from the same cash register drawer. ____ e. Using prenumbered sales tickets.

Karlin Company gathered the following reconciling information in preparing its April bank reconciliation: Cash balance per books, 4/30 \ 13,200 Deposits in transit 1,800 Notes receivable and interest collected by bank 4,440 Bank charge for check printing 150 Outstanding checks 9,000 NSF check 840 The adjusted cash balance per books on April 30 is

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the employee authorized to sign checks.

A $200 petty cash fund has cash of $37 and receipts of $160. The journal entry to replenish the account would include a

Dobler Company gathered the following reconciling information in preparing its June bank reconciliation: Cash balance per books, 6/30 \ 8,400 Deposits in transit 600 Notes receivable and interest collected by bank 1,480 Bank charge for check printing 50 Outstanding checks 3,000 NSF check 280 The adjusted cash balance per books on June 30 is

Physical controls to safeguard assets do not include

A credit balance in Cash Over and Short account is shown as

The preparation of a bank reconciliation is an important cash control procedure. If a company deposits cash receipts daily and makes all cash disbursements by check, explain why the cash balance per books might not agree with the cash balance shown on the bank statement. Identify specific examples that may cause differences between the cash balance per books and the cash balance per bank.

The bank statement for Adcock Company indicates a balance of $830 on July 31. The cash balance per books had a balance of $390 on this date. The following information pertains to the bank transactions for the company. 1. Deposit of $840, representing cash receipts of July 31, did not appear on the bank statement. 2. Outstanding checks totaled $390. 3. Bank service charges for June amounted to $30. 4. The bank collected a note receivable for the company for $1,200 plus $48 interest revenue. 5. A NSF check for $328 from a customer was returned with the statement. Instructions a. Prepare a bank reconciliation for July 31. b. Prepare any adjusting entries necessary as a result of the bank reconciliation.

The cash receipts section of a cash budget includes all of the following except