Exam 7: Fraud, Internal Control, and Cash

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

The fraud triangle applies to

Supervisors counting cash receipts daily is an example of

A petty cash fund is used to pay relatively large amounts.

Using _______________ documents is a control measure that helps to prevent a transaction from being recorded more than once or to prevent the transactions from not being recorded.

When one individual is responsible for all related activities, the potential for errors and irregularities is decreased.

A debit memorandum issued by the bank ______________ the cash balance in the depositor's account.

The most important element of the fraud triangle is rationalization.

Which of the following is not a suggested procedure to establish internal control over cash disbursements?

Bonding involves all of the following except

The following credit sales are budgeted by Gonzalez Company: January \ 102,000 February 150,000 March 210,000 The company's past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale. The anticipated cash inflow for the month of March is

A cash budget contributes to more effective cash management.

Three major sections of a cash budget are: (1)________________, (2)_______________, and (3)______________.

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

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

Listed below are items that may be useful in preparing the March 2014, bank reconciliation for the Carrinton Machine Works. Using the code letters below, insert in the space before each item the letter where the amount would be located or otherwise treated in the bank reconciliation process.

How do these principles apply to cash disbursements: (a) Physical controls? (b) Human resource controls?

What percentage of companies worldwide have experienced fraud in the last two years?

Higgins Company gathered the following reconciling information in preparing its October bank reconciliation: Cash balance per books, 10/31 \ 12,600 Deposits in transit 450 Notes receivable and interest collected by bank 2,550 Bank charge for check printing 60 Outstanding checks 6,000 NSF check 510 The adjusted cash balance per books on October 31 is

From an internal control standpoint, the asset most susceptible to improper diversion and use is