Exam 7: Fraud, Internal Control, and Cash

Control over cash disbursements is improved if major expenditures are paid by check.

A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: The cash inflow in the month of September is expected to be

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

Which item is a current asset?

(Communication) Clinix is a medical office management franchise. There are currently twenty-five medical offices managed by a Clinix franchisee. One of the services provided to franchisees is assistance in training various staff members. Clinix is preparing a manual for the front office staff to use as a reference guide. It will be used in training new employees as well. One of the reasons the manual is being prepared is to stress the importance of strong internal controls. Required: Prepare a short paragraph, to be included in the training materials, describing the benefits of sound internal control, from the viewpoint of the employee.

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

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

Identify the internal control procedures applicable to cash receipts for Colorado Company in each of the following situations. 1. All cashiers are bonded. 2. The treasurer compares the total cash receipts to the bank deposit daily. 3. The bookkeeper records cash receipts which are held by the treasurer. 4. Only the treasurer holds cash receipts. 5. Deposit slips are completed for each deposit.

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

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

The following reconciling items are applicable to the bank reconciliation for the Gunselman Company. Indicate how each item should be shown on a bank reconciliation. a. Outstanding checks. b. Bank credit memorandum for collecting a note for the depositor. c. Bank debit memorandum for service charge. d. Deposit in transit.

A $100 petty cash fund has cash of $10 and receipts of $80. The journal entry to replenish the account would include a credit to

Which of the following is an appropriate internal control activity for cash?

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Which of the following statements is correct?

A check written by the company for $167 is incorrectly recorded by a company as $176. On the bank reconciliation, the $9 error should be

A NSF check for $328 from a customer was returned with the statement. Instructions a. Prepare a bank reconciliation for July 31. b. Prepare any adjusting entries necessary as a result of the bank reconciliation.

James Company had checks outstanding totaling $21,600 on its June bank reconciliation. In July, James Company issued checks totaling $155,600. The July bank statement shows that $105,200 in checks cleared the bank in July. A check from one of James Company's customers in the amount of $1,200 was also returned marked "NSF." The amount of outstanding checks on James Company's July bank reconciliation should be

Before a check authorization is issued, the following documents must be in agreement, except for the

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