Exam 6: Reporting and Analyzing Cash and Internal Controls

A company purchases merchandise on November 2 at a $2,400 invoice price (terms 3/10,n/30) and then pays all amounts owed on November 12.Using periodic inventory and net purchases methods,what are the proper entries to record these two transactions?

The Cash Over and Short account:

The purposes and principles of internal control are fundamentally the same across the globe.However,cultural differences sometimes suggest different emphasis on the mix of control procedures.

The document,also known as the check authorization,that is a checklist of steps necessary for approving an invoice for approval and payments is the:

A bank reconciliation usually yields both an adjusted bank balance and an adjusted book balance.

Receiving and paying for merchandise should be performed by one individual or department to streamline a voucher system and simplify the procedures for purchasing.

The voucher register is a journal that is used to record all approved vouchers within the company.

In comparing the canceled checks on the bank statement with the entries in the accounting records,it is found that check number 4239 for November's rent was correctly written and drawn for $3,790 but was erroneously entered in the accounting records as $7,390.When reconciling the November bank statement,the company should:

What is the net method of recording purchases?

Outstanding checks refer to checks that have been:

A company had $12,000 in accounts receivable and $320,000 in net sales for the current period.Its days' sales uncollected is equal to 13.7 days.

The internal document that is used to notify the appropriate person that ordered goods have been received and to describe the quantities and condition of the goods is the____________________.

The entry to increase the balance in petty cash from $50 to $75 would be to credit the Petty Cash account in the amount of $25.

In comparing the canceled checks on the bank statement with the entries in the accounting records,it is found that check number 2889 for December's utilities was correctly written and drawn for $970 but was erroneously entered in the accounting records as $790.The journal entry to adjust the books for the bank reconciliation would include which of the following for this situation?

The entry to record reimbursement of the petty cash fund for postage expense should include:

The clerk who has access to the cash in the cash register should not have access to the cash register tape or file.

An employee is __________ when a company purchases an insurance policy against losses from theft by that employee.

An analysis that explains any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a (n):

The days' sales uncollected ratio measures a company's ability to manage its debt.

The accountant for Truesdale Inc.prepared the bank reconciliation when the April 30 bank statement was received in the mail.A debit memorandum enclosed with the bank statement listed service charges in the amount of $60.These charges were not recorded by Truesdale prior to receiving the bank statement.How would the company record the required adjusting entry for this item?