Exam 7: Internal Control and Cash

Which of the following is used by many companies to separate cash duties and establish stronger control over cash receipts?

For good controls over cash payments, the person who orders goods from a supplier should always be different from the person who approves the payment.

Which of the following describes the internal control procedure assignment of responsibilities?

Which of the following describes the internal control procedure competent, reliable and ethical personnel?

Which of the following must be signed by the person authorized to write checks drawn on a checking account at a bank?

A pharmaceutical company testing drugs to determine possible side effects is a part of:

The bank collected a note receivable of $1,000. How would this information be included on the bank reconciliation?

In a bank reconciliation, an NSF check will be shown on the bank side of the reconciliation.

Petty cash is a fund containing a small amount of cash that is used to pay for minor expenditures.

Which of the following is a benefit of online banking?

For strong controls over cash receipts, the checks to be deposited should be sent to the treasurer and the remittance advices should be sent to the accounting department.

Under the Sarbanes-Oxley Act, accounting firms are prohibited from both auditing a client and providing certain consulting services for the same client.

Please refer to the following bank reconciliation: Please prepare the adjusting entry for the first reconciling item (note collected by bank.)

An accountant is under pressure to maximize the company's net income at year-end. He is told to record expense payments made in December as if they were actually made the following January. This action would be considered unethical because it is a misrepresentation of actual transactions.

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

External auditors monitor company controls to safeguard assets and ensure that employees are following company policies.

Around the end of the year, an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of goods sold, and thus a higher net income. This action would be considered unethical because it is not a legitimate business transaction.

A company's cash ledger shows an ending balance of $5,000. Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500), two outstanding checks totaling $720, a service charge of $15, a deposit in transit of $180, and interest revenue of $21. What is the adjusted book balance?

A company received a bank statement with a balance of $5,350. Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500), two outstanding checks totaling $720, a service charge of $15, a deposit in transit of $180, and interest revenue of $21. What is the adjusted bank balance?

A petty cash fund was established with a $400 balance. It currently has cash of $9 and petty cash tickets as shown below. The journal entry to replenish the account would be which of the following: