Exam 8: Internal Control and Cash

A company's cash ledger shows an ending balance of $4600.Reconciling items included a bookkeeper error of $80 (a $550 cheque recorded as $630),two outstanding cheques totalling $810,a service charge of $20,a deposit in transit of $260 and interest revenue of $31.What is the adjusted book balance?

If a system of internal controls is too strict or complex,it may harm efficiency and not be cost-effective.

Which of the following must be signed by the person authorised to write cheques drawn on a bank account?

Which of the following statements describes a voucher?

Internal and external auditors are part of which of the following components of internal control?

Which of the following should the purchasing agent NOT be able to do?

The following information is needed to reconcile the cash balance for Fire Steel Ltd: ? A deposit of $5500 is in transit. ? Outstanding cheques total $1500. ? The book balance is $6500 at 28 February 2017. ? The bookkeeper recorded a $1800 cheque as $17,100 in payment of the current month's rent. ? The bank balance at 28 February 2017 was $19,040. ? A deposit of $500 was credited by the bank for $5000. ? A dishonoured cheque from a customer for $3200 was returned by the bank. ? The bank service charge is $60. What was the adjusted bank balance?

Regarding controls over cash receipts by mail,the bank deposit slip should be compared to the remittance advices by the accounting department.

A company urgently needs to repair its fire alarm system,which will cost $6 000.The two senior managers who are authorised to approve payments over $5 000 are both on holiday and cannot be reached.The office manager is only authorised to approve payments up to $5 000 but is concerned about the risks and safety factors involved and wants to have the repair work done immediately.She asks if the contractor could split up the repair bill into two separate invoices,one for parts and one for labour,so that she could approve both of them separately and get the work done right away.This action would not be considered unethical,as long as the office manager does not violate specific company rules or deliberately misrepresent the facts of the situation

Which of the following is the first step in the purchasing and payment process?

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

The bookkeeper of Fire Steel Ltd recorded a $1564 cheque as $15,640 in payment of the current month's rent.Which of the following journal entries is needed to adjust for this error in the books of the company?

In a bank reconciliation,a book error will be shown on the bank side of the reconciliation.

Which of the following statements describes the decision guidelines for an ethical decision?

Which of the following items are both reconciling items on the book side of the reconciliation?

Journal entries that are necessitated by reconciling items on the book side of the reconciliation all include either a debit to Cash or a credit to Cash.

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

An outstanding cheque is a cheque issued by the company and recorded on its books but not yet paid by its bank.

The cash balance in a company's general ledger and the bank's balance on the bank statement will generally be different because of the time lag in recording transactions.

Which of the following statements describes a purchase order?