Exam 8: Internal Control and Cash

In the following situation,which internal control procedure needs strengthening? At Hofstra Services,the accounting clerk fills out unnumbered purchase order forms for purchases of supplies.An operations engineer completes the form with a detailed description of the supplies being ordered,and the operations manager approves the purchase and passes the purchase order back to the accountant for processing.

If a system of internal controls is properly designed and structured,it cannot be overcome or broken into.

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

A purchase order is sent by the purchasing department to:

A company received a bank statement with a balance of $6300.Reconciling items included a bookkeeper error of $300-a $300 cheque recorded as $500-two outstanding cheques totalling $800,a service charge of $22,a deposit in transit of $250 and interest revenue of $19.What is the adjusted bank balance?

Around the end of the year,an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of sales and,thus,a higher profit.This action would be considered unethical because it is not a legitimate business transaction.

Which of the following is NOT included in a voucher?

Which of the following items are both reconciling items on the bank side of the reconciliation?

A strong computer firewall is an essential element of good internal controls for e-commerce.

Which of the following statements describes an invoice from a supplier?

Which of the following is a security procedure designed for e-commerce?

Which of the following conditions must exist for internal controls to be effective?

Which of the following is NOT an advantage of evaluated receipts settlement (ERS)?

Which of the following is a general internal control,but is not classified as an 'accounting control'?

In reconciling a bank statement,the bank balance is $1 800 and the chequebook balance is $1 205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment slips)totalling the same amount.What is this system called?

The bank recorded a $2 000 deposit as $200.How would this information be included on the bank reconciliation?

Which of the following statements describes a receiving report?

The bank charged a service charge of $20.How would this information be included on the bank reconciliation?

Which of the following is the most basic internal control for cash?