Exam 4: Internal Control and Cash

For effective internal control in an organization, the treasurer should have custody of the cash, and the controller should account for the cash.

Assuming estimated cash receipts of $150,500, estimated cash payments of $135,300, and a expected ending cash balance of $32,700, then:

If a bank reconciliation included $600 of outstanding cheques, the journal entry to record this reconciling item would include:

Bank charges are deducted from the ending bank balance in the general ledger when preparing the bank reconciliation.

If a bank statement included an EFT payment of $670 for insurance, the journal entry to record this reconciling item would include a:

Training people thoroughly is an element of which characteristic of internal control?

All of the following steps should be performed by the accounting department prior to the approval of a disbursement except:

Which of the following is prepared by the purchasing department and sent to a vendor that sells the needed merchandise?

Assuming a beginning cash balance of $2,000, estimated cash receipts of $105,900, and a expected ending cash balance of $2,500, then:

In a bank reconciliation, interest revenue earned on a chequing account would be deducted from the book balance.

All of the following are purposes of internal control except:

Cash is the item that is budgeted most often.

When preparing a bank reconciliation, which of the following items would be subtracted from the bank balance on the bank statement?

To maintain effective internal control, the majority of all payments in an organization should be made using cash.

One of the benefits of using cheques is the payment record it provides.

Identify and briefly describe the process of preparing a cash budget and how this information can be used for planning purposes.

The fraud triangle includes: motive, opportunity and rationalization.

If the balance on the bank statement does not equal the balance in the company's Cash account, then you can conclude that:

To control payments for purchases of invoices, the following would not be presented as supporting documents for approval:

On the balance sheet numerous bank accounts and time deposits can be combined and identified on one line as cash and cash equivalents.