Exam 7: Internal Control and Cash

In a bank reconciliation, outstanding checks will be shown on the bank side of the reconciliation.

A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as ________.

Which of the following statements about internal control is true?

A check payment for $658 was incorrectly entered in the Cash account as $856. Which of the following adjustments needs to be made?

The difference that arises between the balance on the bank statement and the balance on the company's books because of a time lag in recording transactions is known as a timing difference.

For the following situation, state whether it represents a strength or weakness in internal control and give the reason for your answer. - Baker Auto Supply purchases merchandise inventory from A & B Company. The accountant places the order, verifies receipt of the merchandise, and records the transaction in the general journal.

To be IFRS compliant, foreign companies are not required to have their internal controls audited by outside auditors.

Banks must return physical copies of the maker's canceled checks.

A petty cash fund was established with a $300 balance. It currently has cash of $73 and petty cash tickets totaling $222 for travel expense. Prepare the journal entry to record the replenishment of the fund. Omit explanation.

It is important for a business to identify policies which ensure that all customers are treated similarly and that results can be measured effectively.

Discuss the roles of the internal auditors and the external auditors.

A check was written by a business for $549 but was recorded erroneously in the Cash account as $459. How would this error be included on the bank reconciliation?

Refer to the following bank reconciliation: - Journalize the adjusting entry for the fourth reconciling item: Bank service charge. Omit explanation

To help prevent theft by the sales clerk, at the end of each day, the manager proves the cash by comparing the cash in the drawer against the cash register's record of cash sales.

A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.

Controlling operations is a key responsibility of a business manager.

A company's Cash account shows an ending balance of $4,600. Reconciling items included a bookkeeper error of $130 (a $500 check recorded as $630), two outstanding checks totaling $830, a service charge of $25, a deposit in transit of $250, and interest revenue of $30. What is the adjusted book balance?

Reducing expenses to increase operating profit is representative of ________.

Before sending the check for payment of goods, the controller should examine the payment pack. List the documents that are included in the payment pack and describe the information provided by each document.

The security measures are the same for any type of cash receipts.