Exam 7: Fraud, Internal Control, and Cash

All of the following activities occur at the time of a cash disbursement from petty cash except

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

If employees are bonded

Control over cash disbursements is generally more effective when

When two or more people get together for the purpose of circumventing prescribed controls, it is called

Internal control is defined, in part, as a plan that safeguards

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

Explain the control principle of independent internal verification? (b) What practices are important in applying this principle?

The custodian of a company asset should

Clark Company developed the following reconciling information in preparing its September bank reconciliation: Cash balance per bank, 9/30 \ 30,800 Note receivable collected by bank 16,800 Outstanding checks 25,200 Deposits in transit 12,600 Bank service charge 210 NSF check 3,360 Using the above information, determine the cash balance per books (before adjustments) for the Clark Company.

The use of prenumbered checks is an example of

In the month of November Gavin Company Inc. wrote checks in the amount of $37,000. In December, checks in the amount of $50,632 were written. In November, $33,872 of these checks were presented to the bank for payment, and $43,532 in December. What is the amount of outstanding checks at the end of December?

Which of the following is an example of a bank reconciliation item that requires an adjusting entry?

Dekin Company had checks outstanding totaling $17,000 on its May bank reconciliation. In June, Dekin Company issued checks totaling $106,400. The July bank statement shows that $79,200 in checks cleared the bank in July. A check from one of Dekin Company's customers in the amount of $800 was also returned marked "NSF." The amount of outstanding checks on Dekin Company's July bank reconciliation should be

What causes the balance on the bank statement to differ from the cash balance in the general ledger?

A $100 petty cash fund has cash of $14 and receipts of $84. The journal entry to replenish the account would include a

Only large companies need to be concerned with a system of internal control.

Bank errors

The control principle related to not having the same person authorize and pay for goods is known as

All of the following actions would strengthen internal control over a petty cash fund except