Exam 6: Internal Control and Accounting for Cash

Rainey Company's true cash balance at October 31 is $5,710. The following information is available for the bank reconciliation:Outstanding checks, $600Deposits in transit, $450Bank service charges, $90The bank had collected an account receivable for Rainey Company, $1,000The bank statement included a NSF check written by one of Ramsey's customers for $600.What was the unadjusted book balance at October 31?

What are the three basic types of audit opinion, and what is the meaning of each? Which type of opinion is the most favorable? Which is the most negative?

A review of the bank statement and accounting records of Blake Company revealed the following items: Which of the item(s)would be added to the unadjusted bank balance to determine the true cash balance?

Duke Company's unadjusted bank balance at March 31 is $2,300. The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400. What is the true cash balance?

An error is considered material if it would trigger an IRS audit.

What asset is generally most susceptible to theft?

What is meant by the term, material?

While performing its monthly bank reconciliation, the bookkeeper for Grace Corporation noted that a deposit of $990 (received from a customer on account)was recorded in the company books as $900. Which of the following shows the effect of correcting the error on the financial statements?

For financial reporting purposes, cash generally includes currency and other items that are payable on demand, such as checks, money orders, bank drafts, and certain savings accounts.

Which of the following statements regarding the SEC is not true?

Which of the following is not a motive for the embezzlement of cash by employees?

On May 1, Campbell Company established a petty cash fund in the amount of $400. Required:a)Is the establishment of the fund an asset source, asset use, or asset exchange transaction?b)Record the establishment of the petty cash fund in the horizontal financial statements model, below. Indicate the dollar amounts of increases and decreases; for accounts that are not affected, indicate NA. For cash flows, show whether they are operating activities (OA), investing activities (IA), or financing activities (FA).