Exam 7: Internal Control and Cash

Using the following information, prepare a bank reconciliation for Miller Co. for August 31: (a)The bank statement balance is $4,690 (b)The cash account balance is $5,080.(c)Outstanding checks amounted to $715.(d)Deposits in transit are $1,020.(e)The bank service charge is $40.(f)A check for $72 for supplies was recorded as $27 in the ledger.

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

Thompson Corporation gathered the following reconciling information in preparing its October bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for Thompson Corporation.

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the petty cash account.

The amount of cash to be reported on the balance sheet at June 30 is the

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would be included in the bank reconciliation as a(n)

A customer's check received in settlement of an account receivable is considered cash.

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures. 1. Mandatory vacations 2. Personnel policies 3. Report of outside consultants on future market changes

Which of the following could signal internal control problems within the accounting system? (1) Safeguarding inventory in a locked warehouse (2) Abuse of alcohol or drugs (3) Gaps in transactions numbers (4) Operating style of management (5) Sudden increase in slow payments

A $135 petty cash fund has cash of $18 and receipts of $120. The journal entry to replenish the account would include a

Which of the following related to a company's control procedures? (1) Separating responsibilities for related operations (2) Safeguarding inventory in a locked storeroom (3) Identifying a sudden increase in slow payments (4) Operating style of management (5) Requiring employees to take vacations

Match the following elements of internal control: -control procedures A)provides reasonable assurance that business goals will be achieved B)used by management for guiding operations and ensuring compliance with requirements C)overall attitude of management and employees D)used to locate weaknesses and improve controls E)identify, analyze and assess likeliness of vulnerabilities

Match each item to a bank statement adjustment, a company books adjustment, or either. -Bank charges A)bank statement adjustment B)company books adjustment C)either

The cash account in the company's ledger is a(n)

Sarbanes-Oxley's purpose is to maintain public confidence and trust in the financial reporting of companies.

The type of account and normal balance of Petty Cash is a(n)

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

"To maintain public confidence and trust in the financial reporting of companies" is the purpose of