Exam 7: Internal Control and Cash

The following information is needed to reconcile the cash balance for Baker's Dry Cleaning,Inc. • A deposit of $5,700 is in transit. • Outstanding checks total $1,300. • The book balance is $6,400 at February 28,2017. • The bookkeeper recorded a $1,500 check as $17,300 in payment of the current month's rent. • The bank balance at February 28,2017 was $16,930. • A deposit of $300 was credited by the bank for $3,000. • A customer's check for $3,500 was returned for nonsufficient funds. • The bank service charge is $70. What was the adjusted book balance?

A check was written by a business for $507 but was recorded in the journal as $705.How would this error be included on the bank reconciliation?

Which of the following statements describes a purchase order?

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account.Cash plus petty cash tickets total the amount allocated to the petty cash fund.

A ________ is a document explaining the reasons for the difference between a depositor's Cash account in the ledger and the depositor's cash balance in its bank account.

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

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

Before any internal control procedure is initiated,which of the following questions must be primarily addressed by a company?

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

A deposit ticket is a document that instructs a bank to pay the designated person a specified amount of money.

A company has a petty cash fund amount of $300.When replenished,it has petty cash receipts of $33 for gas expense,$31 for postage expense,$11 for supplies expense,and $12 for miscellaneous expenses.Assume the cash balance is not over or short.In the journal entry,Cash would be credited for ________.

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer. - The movie theater has the following policy.Tickets are sold by the cashier.The ticket stubs are collected by the ticket taker.The ticket stubs are stored in a locked box,and the accounting personnel match the number of ticket stubs to the number of tickets sold.

On a bank reconciliation,deposits in transit are added on the bank side of the reconciliation.

Journal entries are required if the bank reconciliation includes a book error.

Cash is a highly liquid asset,but cash equivalents are not highly liquid assets.

Under the Sarbanes-Oxley Act,accounting firms are allowed to audit a public company and provide certain consulting services for the same client.

If a bank reconciliation includes interest revenue,a journal entry is required which credits Cash and debits Interest Revenue.

A(n)________ is a device that enables members of a local network to access the network while keeping nonmembers out of the network.

When a check is issued,the party who is paying the cash is referred to as the ________.