Exam 8: Cash and Internal Controls

Havermill Co. establishes a $250 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $73 for Office Supplies, $137 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $18. On October 1, the accountant determines that the fund should be increased by $50. The journal entry to record the reimbursement of the fund on September 30 includes a:

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

Two clerks sharing the same cash register is a violation of which internal control principle?

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

The number of days' sales uncollected is calculated by:

When reimbursing the petty cash fund:

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Identify each of the following items 1 through 10 as either (A)cash or (B)cash equivalent. 1. Coins _____ 2. Petty cash _____ 3. Three-month certificate of deposit 4. Commercial paper _____ 5. Currency 6. Certified check 7. Cashier's check _____ 8. Money market accounts 9. Money orders _____ 10. U.S. treasury bills

Assigning purchasing, receiving, and paying for merchandise to one department or individual is a way to streamline a voucher system.

The three parties involved with a check are:

Meng Co. maintains a $300 petty cash fund. On January 31, the fund is replenished. The accumulated receipts on that date represent $80 for office supplies, $160 for merchandise inventory, and $20 for miscellaneous expenses. There is a cash shortage of $8. The journal entry to replenish the fund on January 31 is:

Freeman Co. had net sales of $4.2 million and ending accounts receivable of $0.8 million. Its days' sales uncollected equals:

The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Quibble Company established a $300 petty cash fund by issuing a check to the custodian on February 1. On February 15, the petty cash fund was replenished and increased to $800 in total. The contents of the petty cash fund at the time of the February 15 replenishment were: Currency and coins \ 12 Petty cash receipts for: Transportation- in for inventory \ 39 Delivery expense 88 Repairs to office equipment 47 Postage 64 Entertainment of customers 53 291 Total \ 303 The company uses the perpetual inventory method. Prepare Quibble's general journal entry to record both the reimbursement and the increase of the petty fund on February 15.

At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash register is $2,058. The correct entry to record the cash sales is

A remittance advice is a(n):