Exam 7: Fraud, Internal Control and Cash

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

When making a payment from the petty cash fund for postage stamps, the following journal entry is made.

An application of good internal control over cash disbursements is

The use of remittance advices for mail receipts is an example of

Electronic Funds Transfer (EFT) is a disbursement system that uses a telephone or computer to transfer cash from one location to another.

Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency.

Cash equivalents are defined by IFRS as

A system of internal control consists of the plan of organization and all of the related methods and measures adopted within a business to (a) safeguard its assets, and (b) enhance the accuracy and reliability of its accounting records.

A bank statement

An exception to disbursements being made by check is acceptable when cash is paid

Sarbanes Oxley applies to

A credit balance in Cash Over and Short is reported as a(n)

Blank checks

A debit memorandum would not be issued by the bank for

Postage stamps on hand are considered to be

The entry to replenish a petty cash fund includes a credit to

A petty cash fund should be replenished

A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $93.The entry to replenish the fund would

Internal controls are concerned with

A debit balance in Cash Over and Short is reported as a