Exam 7: Fraud, Internal Control, and Cash

Electronic funds transfer (EFT) is a disbursement system that transfers cash from one location to another using

Holcomb Company expects to have a cash balance of $43,000 on January 1, 2014. These are the relevant monthly budget data for the first two months of 2014. 1. Collections from customers: January $85,000, February $132,000 2. Payments to suppliers: January $40,000, February $50,000 3. Wages: January $34,000, February $40,000. Wages are paid in the month they are incurred. 4. Administrative expenses: January $24,000, February $31,000. These costs include depreciation of $1,000 per month. All other costs are paid as incurred. 5. Selling expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred. 6. Sales of short-term investments in January are expected to realize $12,000 in cash. Holcomb has a line of credit at a local bank that enables it to borrow up to $40,000. The company wants to maintain a minimum monthly cash balance of $25,000. Instructions Prepare a cash budget for January and February.

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

The fraud triangle applies to

An example of segregation of duties is having a check signer recording cash disbursements.

The petty cash fund eliminates the need for a bank checking account.

The following information was taken from Mitchell Company cash budget for the month of July: If the company has a policy of maintaining end of the month cash balance of $100,000, the amount the company would have to borrow is

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

Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company's checkbook for subsequent misappropriation of funds?

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?

A $200 petty cash fund has cash of $37 and receipts of $160. The journal entry to replenish the account would include a

Which of the following would not be included in the definition of cash?

Which one of the following items would not be considered cash?

Internal auditors

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 June is expected to be

The following information is available for Nichols Company for the month of February: expected cash receipts $40,000; expected cash disbursements $44,000; cash balance February 1, $11,000. Management wishes to maintain a minimum cash balance of $10,000. Prepare a basic cash budget for the month of February.

One of your accounting professors has alerted you about a job opportunity as an internal auditor. a. What is the role of an internal auditor? b. Is this position justified? Why or Why not?

Related purchasing activities include

Sound internal control activities dictate that the amount of cash on hand should be kept to a maximum.

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