Exam 2: Internal Control and Cash

When a bank pays interest on a company's chequing account balance,the bank will likely issue a credit memo.

Which of the following documents is NOT used in the control of cash receipts?

A cheque that "bounced" or was returned by the bank due to lack of funds is called a(n)____________________.

What is allowing only certain employees to order goods and services on behalf of the company an example of?

Delco Construction The following items relate to the company's March bank reconciliation: Bank statement balance \2 9,600 Unadjusted cash balance according to company records ? Deposit in transit 2,200 Outstanding cheques 3,100 Bank service charges 200 Interest earned on the bank account 100 Customer's NSF cheque returned by the bank 300 -Refer to the information provided in the figure Delco Construction.What is the company's adjusted cash balance at March 31?

Why is cash management necessary?

Which of the following is NOT a component of effective cash management and control for a company's operating cycle?

Which of the following is NOT considered to be a cash equivalent?

The accountant must make journal entries for all items in the book section of the bank reconciliation.

Explain how a company can control small cash payments that are made in cash rather than by cheque.

If a company has an internal audit function,it does NOT need to have external auditors.

What is the term for a cheque returned by a bank because the issuer's cash account balance could NOT cover the cheque?

Delco Construction The following items relate to the company's March bank reconciliation: Bank statement balance \2 9,600 Unadjusted cash balance according to company records ? Deposit in transit 2,200 Outstanding cheques 3,100 Bank service charges 200 Interest earned on the bank account 100 Customer's NSF cheque returned by the bank 300 -Refer to the figure Delco Construction.What is the company's unadjusted cash balance in its accounting records at March 31 before the reconciliation is completed?

During April,Downtown Iron Works engaged in the following transactions involving its petty cash fund: Prepare the journal entries necessary to record the company's petty cash transactions.

Designs on You The following information relates to the company's May bank reconciliation: Bank statement balance \5 ,000 Unadjusted cash balance according to company records ? Deposit in transit 1,000 Outstanding cheques 500 Bank service charges 50 Interest earned on the bank account 10 Customer's NSF cheque returned by the bank 25 In addition, a cheque was recorded in the accounting records as $1,200 but the correct amount as recorded by the bank was only $1,000. -Refer to the figure Designs on You.What is the net amount of the adjustments to the company's cash balance as a result of the bank reconciliation process?

The elapsed time between the purchase of goods for resale and the collection of cash from customers is referred to as the ____________________ cycle.

Which of the following is a credit memo?

When reconciling a bank account,the company has to prepare an adjusting entry for outstanding cheques.

When a bank reconciliation is being prepared,which of the following items is subtracted from the balance per the bank statement?

A debit memo may be issued in the monthly bank statement for the bank to notify a company that a service charge has been assessed on the company's account.