Exam 4: Internal Control and Cash

Each of the following items is considered a cash equivalent except

A physical count of inventory is required even though the company uses the perpetual inventory system. This is an example of which of the following internal control activities?

Match the following terms with their correct definition. a.Cash equivalents c.Operating cycle b.Cash over and short d.Petty cash -Amounts on deposit with financial institutions and investments primarily held in money market accounts, with original maturities of less than 90 days

Which of the following is not a sound internal control procedure for cash disbursements?

Strategic risk assessment is designed to identify, analyze, and manage possible threats to the organization's success concerning ____________________ forces such as competitors, customers, suppliers, and PEST factors.

Which of the following is a reconciling item on the bank side of a bank reconciliation?

Match the following terms with their correct definition. a.Bank reconciliation d.Outstanding check b.Deposit in transit e.Service charges c.Non-sufficient funds check -A bank reconciling item that must be subtracted from the unadjusted bank balance when preparing a bank reconciliation

Which of the following is not considered to be a Cash Equivalent?

Dinah Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for June 2013 indicated the following: An analysis of canceled checks and deposits and the records of Dinah revealed the following items: The correct amount of check # 3549 is $760, but it was recorded as a cash disbursement of $670. The check was issued to pay for merchandise purchased. The check was written correctly and appeared on the bank statement correctly.

A credit memo appeared on the September bank statement. How should this amount be treated on the September bank reconciliation?

Match the following terms with their correct definitions. a.Accounting system e.Internal control system b.Business process risks f.Safeguarding c.Control activities g.Segregation of duties d.Control environment h.Strategic risks -Possible external threats to the organization's success in accomplishing its goals

The accounting records for Durden Rentals shows a cash balance of $13,676 on March 31, 2013. On the evening of March 31, company receipts of $3,250 were placed in the bank's night deposit drop box; this deposit was processed by the bank on April 1. The March 31 bank statement shows balance of $9,866, including a service charge of $45, an NSF check from a customer for $210, and a $650 debit memo for the payment of the company's utility bill. All of the checks that the company had written during March were listed on the bank statement except for check #2156 in the amount of $345. Prepare a bank reconciliation to calculate the company's adjusted cash balance at March 31, 2013.

Allowing only certain employees to order goods and services on behalf of the company is an example of what internal control activity?

If a company erroneously records a $50 check received from a customer as $500 in its records, which of the following must occur when reconciling its bank statement?

In a sound system of internal control, cash receipts should be deposited daily.

Which one of the following statements is true?

Each of the following documents is used in the control of cash disbursements except

While reconciling the checking account, the accountant noticed that an error had been made in recording a check received by the company. The bookkeeper had recorded the receipt as $729 but the correct amount of the check was $279. Which of the following reconciling adjustments is necessary?

An effective system of internal control is critical to protecting a company's investment in cash. Identify the five control activities and provide one example that relates to each control as it would be applied to cash.

-Refer to Delco Construction. What is the company's unadjusted cash balance in its accounting records at March 31st before the reconciliation was completed?