Exam 8: Internal Control and Cash

A petty cash fund was established with a $250 balance.It currently has cash of $38 and petty cash tickets totaling $212 for travel expense.Prepare the journal entry to record the replenishment of the fund.Omit explanation.

Which of the following describes the risk assessment component of internal control?

The journal entry to replenish a petty cash fund includes a debit to the Petty Cash account and a credit to the proper expense account(s).

Evaluated receipts settlement (ERS)is a streamlined process that bypasses paper documents altogether.

Which one of the following items requires an adjustment on the bank side of the bank reconciliation?

A signature card is a card that shows each authorized person's signature for a bank account.

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

Electronic funds transfers move cash by electronic communications.

Mercury Company established a petty cash fund with a $600 balance.Which of the following statements is incorrect?

Match each term to its definition. -Check

Fashion Barn Company,a retailer,accepts payment through credit cards.During August,credit card sales amounted to $12,000.The processor charges a 3% fee.Assume that the processor deposits the net amount.Prepare the journal entry for credit card sales.(Ignore cost of goods sold.)Omit explanation.

The only time the Petty Cash account is used in a journal entry is when the account is established,increased,or decreased.

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.

The following information is available for Ashley Company for the month ending June 30,2019. $* \quad$ Balance as per the bank statement is $\$ 11,240$ . * Balance as per books is $\$ 10,200$ . * Check #506 for $1,200 and check #510 for $900 were not show on the June 30 bank statement. * A deposit in transit of $\$ 3,110$ had not been received by the bank when the bank statement was generated. * A bank debit memo indicated an NSF check for $\$ 85$ written by Maddie Wolfe to Ashley Company on June 13 . * A bank credit memo indicated a note collected by the bank of $\$ 2,100$ and interest revenue of $\$ 55$ on June 20 . * The bank statement indicated service charges of $\$ 20$ . Prepare bank reconciliation for Ashley Company for June 30,2019.

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

Which of the following items would require an adjusting entry after preparation of the bank reconciliation?

Which of the following statements describes a receiving report?

As a part of the internal control over cash receipts by mail,the mailroom sends both the customer checks and the remittance advices to the accounting department.

The bank statement reports the activity in the customer's account and is issued on an annual basis.

City Advertising Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not.Which internal control procedure needs strengthening?