Exam 7: Internal Control and Cash

Please refer to the following bank reconciliation: Please prepare the adjusting entry for the fourth reconciling item (bank service charge.)

In a bank reconciliation, a deposit in transit will be shown on the bank side of the reconciliation.

In the following situation, which internal control procedure needs strengthening? At Hofstra Services, the operations accountant is responsible for safeguarding and maintaining the pipe inventory and also to record inventory transactions into the journal. A separate accounting clerk keeps records of the cash receipts and payments. The treasurer signs checks and approves contracts.

A point-of-sale terminal (cash register)provides control over cash in the form of a tape record of sales which is compared to the count of the drawer.

Which of the following is NOT one of the purposes of internal control?

Which of the following is a security procedure designed for e-commerce?

If a single person is authorized to both order goods and approve payments, the company may be defrauded in several ways. Which of the following scenarios would NOT be a possible consequence of this control weakness?

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

In the following situation, which internal control procedure needs strengthening? Hofstra Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard. That employee has not yet been adequately trained on the maintenance needs of the equipment.

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

As part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and the remittance advices to the accounting department.

A check was written by a business for $205, but was recorded in the cash payments journal as $502. How would this error be included on the bank reconciliation?

In a bank reconciliation, outstanding checks will be shown on the bank side of the reconciliation.

Which of the following would be included in a journal to record an NSF check?

The following information is needed to reconcile the cash balance for Woods Paper Products. • A deposit of $5,794.62 is in transit. • Outstanding checks total $1,533.25. • The book balance is $5,695.62. • The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent. • The bank balance at February 28, 2008 was $16,500.25. • A deposit of $300 was credited by the bank for $3,000. • A customer's check for $1,280 was returned for nonsufficient funds. • The bank service charge is $70. Based on this information, complete a bank reconciliation, in the format below, for Woods Paper Products as of February 28, 2013.

Which of the following is a common tactic to overcome internal controls?

For good controls over cash payments, the company officer approving a payment voucher should be the same as the person who ordered the goods, to ensure that the correct amount of cash is paid.

Please refer to the following bank reconciliation: Please prepare the adjusting entry for the second reconciling item (interest revenue.)

A company has a petty cash fund amount of $200. When replenished, it has petty cash receipts of $15 for gas expense, $23 for postage expense, $18 for supplies expense and $12 for miscellaneous expenses. In the journal entry, Cash would be credited for:

In the following situation, which internal control procedure needs strengthening? The controller's duties include approving bank reconciliations, approving general journal entries, hiring administrative staff, and approving various types of administrative expenses. She needs new computer equipment for the accounting office, but there are no guidelines specifying whether she can approve purchases of office equipment.