Exam 8: Internal Control and Cash

In reconciling a bank statement, the bank balance is $1,800 and the chequebook balance is $1,205. Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

List and describe the components of internal control and control procedures.

Which of the following statements is true?

Table 8-1 The petty cash fund had the following petty cash ticket: Toner for a printer \ 42 Freight to deliver goods sold 39 Freight on inventory purchased. 112 Miscellaneous expense 10 Postage expense -Refer to Table 8-1. Assume that the business has established a petty cash fund in the amount of $250 and that the amount of cash in the fund at the time of replenishment is $20. The business uses a perpetual inventory system. Prepare the entry to replenish the fund on February 28.

Separation of duties and responsibilities is essential in the control procedures for both cash receipts and cash disbursements.

Using the following information, record journal entries that would be necessary after preparing the bank reconciliation for Johnson Brothers. All items will not require an entry. a)The book balance is $5,895.62. b)Outstanding cheques total $1,233.25. c)The bank service charge based on the bank statement is $50. d)A customer's cheque for $500 was returned for non-sufficient funds. e)A deposit of $3,000 was credited to Johnson Brothers for $300 by the bank. f)The bookkeeper recorded a $1,200 cheque as $120 in payment of the current month's rent.

Which of the following auditors are employees of the business?

A bank reconciliation:

The entry to establish the petty cash fund is:

The bank statement lists a $700 deposit as $70. On a bank reconciliation, the correction will appear as a(n):

Different people should perform various accounting duties to minimize errors and the opportunities for fraud.

If a bank reconciliation included a credit memo for a $2,000 note collected with an additional $20 of interest revenue, the entry to record this reconciling item would include a:

Which of the following items used to reconcile cash does not require an adjusting entry?

Paying top salaries to attract top-quality employees is a part of which characteristic of internal control?

Outstanding cheques are cheques:

The Sarbanes-Oxley Act has impacted Canadian companies in the following way.

The Calder Company received a bank statement showing a balance of $60,300. Reconciling items included outstanding cheques of $1,450 and a deposit in transit of $8,500. What is the company's adjusted bank balance?

Members of CPA Canada, have no set standards for ethical conduct.

Persons who authorize transactions should not handle the related asset. This is an example of which characteristic of internal control?

After preparing the bank reconciliation, journal entries must be prepared for: