Exam 7: Fraud, Internal Control, and Cash

Dobler Company gathered the following reconciling information in preparing its June bank reconciliation: The adjusted cash balance per books on June 30 is

The cash records of Landis Company show the following four situations. 1. The June 30 bank reconciliation indicated that deposits in transit total $1,080. During July the general ledger account Cash shows deposits of $24,820, but the bank statement indicates that only $23,400 in deposits were received during the month. 2. The June 30 bank reconciliation also reported outstanding checks of $1,020. During the month of July, Landis Company books show that $25,800 of checks were issued. The bank statement showed that $24,600 of checks cleared the bank in July. 3. In September, deposits per the bank statement totaled $40,100, deposits per books were $38,100, and deposits in transit at September 30 were $3,150. 4. In September, cash disbursements per books were $35,550, checks clearing the bank were $37,500, and outstanding checks at September 30 were $2,150. There were no bank debit or credit memoranda. No errors were made by either the bank or Landis Company. Instructions Answer the following questions. (a) In situation (1), what were the deposits in transit at July 31? (b) In situation (2), what were the outstanding checks at July 31? (c) In situation (3), what were the deposits in transit at August 31? (d) In situation (4), what were the outstanding checks at August 31?

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

If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682, the appropriate treatment on the bank reconciliation would be to

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

A company maintains the asset account, Cash in Bank, on its books, while the bank maintains a reciprocal account that is

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

A deposit made by a company will appear on the bank statement as a

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

Of the following employees, who should prepare the bank reconciliation?

A bank statement

Tangible frauds include

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

In the month of May, Lopat Company Inc. wrote checks in the amount of $55,500. In June, checks in the amount of $75,948 were written. In May, $50,808 of these checks were presented to the bank for payment, and $65,298 in June. What is the amount of outstanding checks at the end of May?

Collier Company has implemented a just-in-time system, which relies on suppliers to deliver goods for resale as needed. This implementation is most consistent with which of the following basic principles of cash management?

Bishop Company wrote checks totaling $34,160 during October and $37,300 during November. $32,480 of these checks cleared the bank in October, and $36,440 cleared the bank in November. What was the amount of outstanding checks on November 30?

Internal control is most effective when several people are responsible for a given task.

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

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

The following credit sales are budgeted by Gonzalez Company: 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