Exam 7: Internal Control and Cash

In reconciling a bank statement, the bank balance is $1000 and the checkbook balance is $1205. Which of the following is the MOST probable reason why the checkbook balance is larger than the bank balance?

A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash tickets as shown below. The journal entry to replenish the account would be which of the following:

The following information is available for Andersen Company for the month ending June 30, 2013. • Balance per the bank statement is $10,241.43. • Balance per books is $9,745.06. • Check #506 for $1,948.52 and check #510 for $1,800.25 were not returned with the June 30 bank statement. • A deposit in transit of $5,113.40 had not been received by the bank when the bank statement was generated. • A bank debit memo indicated an NSF check in the amount of $79 written by Bruce Garrett to Andersen Company on June 13. • A bank credit memo indicated a note collected by the bank of $1,900 and interest revenue of $75 on June 20. • The bank statement indicated service charges of $35. Prepare a bank reconciliation for Andersen Company for June 30, 2013 in the format shown below.

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 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. What was the adjusted book balance?

Which of the following items would require an adjusting entry after preparation of the bank reconciliation?

Which of the following is NOT included in a voucher?

As long as the same person deposits customer checks and records the deposits into the ledger, there will be good internal control over cash receipts.

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

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. Which of the following journal entries is needed to adjust for the NSF check?

Before any internal control procedure is initiated, a question which should be addressed by the company is:

A petty cash fund was established with a $250 balance. It currently has cash of $31 and petty cash tickets totaling $219. Which of the following would be included in the entry to replenish the fund?

Internal control is the organizational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policy, promote operational efficiency, and ensure accurate and reliable accounting records.

Which is NOT a provision of Sarbanes-Oxley?

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

A system where customers send their checks directly to the company's bank account is described as which of the following?

Which of the following is a requirement of the Sarbanes-Oxley Act?

The following information is available for Matt's Unlimited Company for the current month. What is the adjusted book balance on the bank reconciliation?

Which of the following statements describes an invoice from a supplier?

A petty cash fund was established with a $300 balance. It currently has cash of $77 and petty cash tickets totaling $222 for travel expense. Please provide the journal entry to record the replenishment of the account.