Exam 7: Internal Control and Cash

Tell Ltd's bank statement showed a credit balance of $7 000 at 30 November. It also showed bank service charges of $1 100 and the collection of a note for the company amounting to $300. Unpresented cheques were $700 and there was an outstanding deposit for $2 300. What was the bank balance in Tell Ltd's books at 30 November before the adjustments?

In preparing the monthly bank reconciliation, Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760. Outstanding cheques total $9 400 and there is a deposit in transit for $2 900. It will be necessary to make journal entries for:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $240 in interest earned on the account is to:

Included in the bank statement was a debit for an NSF (not sufficient funds) payment received from a customer. What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a deposit for $2 300 not appearing on the bank statement is to:

Alison Ltd's bank statement showed a debit balance of $7 000 at 31 December. It also showed bank service charges of $1 100 and a direct credit received from a customer for the company amounting to $300. Unpresented cheques were $700 and there was an outstanding deposit for $2 300. What was the bank balance in Alison Ltd's books at 31 December before the adjustments?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a $450 cheque outstanding at end of month is to:

Segregation of duties involves:

Which of the following is NOT true of a sound system of internal control?

Simon Ltd's bank statement showed a credit balance of $14 000 at 31 October. It also showed bank service charges of $2 200 and a direct credit received from a customer amounting to $600. Unpresented cheques were $1 400 and there was an outstanding deposit for $4 600. What was the final bank balance in Simon Ltd's ledger at 31 October?

Included in the bank statement was a debit for bank service charges. What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $870 from a debtor paid directly into the company's bank account is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a $8 100 dividend on shares, deposited directly into the bank account, appearing on the bank statement is to:

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

In terms of an effective internal control system, the practice of issuing identification cards to employees assists:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for monthly bank service charges, $30, appearing on the bank statement is to:

Which of the following is NOT a significant feature of a system of internal control over cash?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque for $871 in payment of an account payable that was erroneously entered as $817 in the company's books is to:

Which of the following is NOT a way that management can establish effective control over the company's affairs?