Exam 7: Fraud, Internal Control, and Cash

Adler Company developed the following reconciling information in preparing its December bank reconciliation: Cash balance per bank, 12/31 \ 20,000 Note receivable collected by bank 10,000 Outstanding checks 15,000 Deposits in transit 7,500 Bank service charge 125 NSF check 2,000 Using the above information, determine the cash balance per books (before adjustments) for the Adler Company.

Cash is defined by IFRS as

In a small business, the lack of certain separations of duties can best be overcome by

Identify whether each of the following items would be (a) added to the book balance, or (b) deducted from the book balance in a bank reconciliation. 1. EFT transfer to a supplier. 2. Bank service charge. 3. Check printing charge. 4. Error recording check # 214 which was written for $230 but recorded for $320. 5. Collection of note and interest by bank on company's behalf.

In the month of May, Lopat Company Inc. wrote checks in the amount of $46,250. In June, checks in the amount of $63,290 were written. In May, $42,340 of these checks were presented to the bank for payment, and $54,415 in June. What is the amount of outstanding checks at the end of June?

Which of the following bank reconciliation items would not result in an adjusting entry?

Which of the following is not an internal control procedure for cash?

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation?

Two individuals at a retail store work the same cash register. You evaluate this situation as

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

Sarbanes Oxley applies to

A __________________ fund is used to pay relatively small expenditures.

A bank reconciliation should be prepared

Mrs. Smith has worked for Bosco Inc. for 20 years without taking a vacation. An internal control feature that would address this situation would be

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

Which of the following would not be reported on the balance sheet as a cash equivalent?

All of the following bank reconciliation items would result in an adjusting entry on the company's books except

Segregation of duties among employees eliminates the possibility of collusion.

A check returned by the bank marked "NSF" means