Exam 6: Internal Control and Accounting for Cash

Use the following to answer questions Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element. -Landau Company established a petty cash fund by issuing a check in the amount of $500 to the petty cash custodian.

Which of the following internal control procedures does not ordinarily apply to the management of the petty cash fund?

Which of the following is not an internal control procedure for the control of cash receipts?

In preparing a bank reconciliation,typical adjustments to the book balance include bank service charges,customer NSF checks,and certified checks.

A credit balance in Cash Short and Over represents a shortage of cash and would be treated as an expense.

Woods Company made the following journal entries related to its bank reconciliation for October 31,2016: Required: a)Assuming that the unadjusted cash balance on Woods's books was $8,354.28,what was the true cash balance at the end of the month? b)Prepare the portion of the bank reconciliation that begins with the unadjusted book balance and ends with the true cash balance.

Separation of duties in an organization should be required to reduce the likelihood of theft.

Use the following to answer questions A review of the bank statement and accounting records of the Blake Company revealed the following items: -Which of the item(s)would be added to the unadjusted bank balance to determine the true cash balance?

Which of the following entries would be required to establish a $500 petty cash fund?

The Securities and Exchange Commission regulates financial reporting of all publicly traded U.S.companies.

Which of the following is not a procedure to maintain internal controls over cash payments?

For a business,Cash generally includes currency,customers' checks,and some savings accounts.

Are outstanding checks an adjustment to the book balance,the bank balance,or not used in a bank reconciliation?

Use the following to answer questions Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element. -Landau Company replenished its petty cash fund.The expenditures of the fund included postage,office supplies,and other miscellaneous items.Indicate the effects of recognizing the expenditures on financial statements and the replenishment of the petty cash fund.

Use the following to answer questions Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element. -In preparing the bank reconciliation for Heath Company,an employee discovered an error.A $654 cash receipt for the collection of an account receivable was recorded in the company's books as $645.The deposit slip was correct,and the bank deposit had been correctly prepared.The error appeared only in the company's accounting records.

On April 30,2016,Midwest Company established a petty cash fund of $1,000.On May 1,2016,a disbursement of $355 was made from the fund for payment of delivery expense.What entry should be made on May 1,2016 to record this disbursement?

While performing the monthly bank reconciliation,the bookkeeper for Avon Company made the journal entry for a bank service charge of $20.Which of the following correctly shows the effect of the entry on the financial statements?

Explain the meaning of "internal control" and distinguish between administrative controls and accounting controls.

Indicate whether each of the following statements is true or false. _____ a)Debit memos in a bank statement describe transactions that increase the depositor's assets. _____ b)Credit memos in a bank statement describe transactions that act to increase the bank's liabilities. _____ c)Service fees charged by a bank appear on bank statements as credit memos. _____ d)Deposits in transit appear on the bank statement as credit memos. _____ e)Outstanding checks do not appear on the bank statement.

Even a good system of internal controls can be overridden by collusion among employees.