Exam 6: Reporting and Analyzing Cash and Internal Controls

Highlight Hotel deposits all cash receipts on the day when they are received and it makes all cash payments by check.At the close of business on December 31,its Cash account shows a $18,393,debit balance.Highlight Hotel's June 30 bank statement shows $15,921 on deposit in the bank.Prepare the necessary adjusting journal entries using the following information 1.Outstanding checks as of December 31 total $2,261. 2.The December 31 bank statement included a $35 debit memorandum for bank services. 3.Check No.2519,listed with the canceled checks,was correctly drawn for $850 in payment of a utility bill on December 16.Highlight Hotel mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $805. 4.The December 31 cash receipts of $3,425 were placed in the bank's night depository after banking hours and were not recorded on the December 31 bank statement. 5.The bank statement included a check from a customer's payment of an account receivable that had been returned NSF in the amount of $1,228. Prepare the necessary adjusting journal entries.

Hasbro had $2,816 million in sales and $555 million in ending accounts receivable for the current period.For the same period,Mattel reported $4,885 million in sales and $491 million in ending accounts receivable.Calculate the days' sales uncollected for both companies as of the end of the current period.Which company is doing a better job in managing the collection of its receivables?

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Vouchers should be used only for purchases.Other expenditures do not need to go through the voucher system.

Collusion is when a person embezzles money from a company and tries to hide the evidence.

Outstanding checks are checks the bank has paid and deducted from the customer's account during the month.

Which of the following statements is true regarding the documents in a voucher system?

Cash equivalents are short-term highly liquid investment assets that are easily converted to cash and have maturities of one year.

Internal control policies and procedures are the same for all companies.

A company's internal control system:

A _____________________________ fund is used for the control of small amounts of cash disbursements.

The document that is an itemized statement of goods prepared by the vendor listing the customer's name,items sold,sales prices and terms of the sale is the __________________________.

Identify each of the following items as either (a)cash or (b)cash equivalent.

The petty cash fund should be reimbursed when it is nearing zero and at the end of the accounting period when financial statements are prepared.

The document that the purchasing department prepares and sends to the vendor to place an order is the

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

The following information is available for the Edwards Company for its March 31 bank reconciliation: From the March 31 bank statement: NSF: A check from a customer,Cook Co.in payment of their account. IN: Interest earned on the account. From the Edwards Company's accounting records: a. Based on the above information, prepare a bank reconciliation for the Edwards Company. b. Prepare the necessary general journal entries to adjust cash to the reconciled balance.

A company established a petty cash fund in May of the current year and experienced the following transactions affecting the fund during May: May 1 Establish petty cash account in the amount of $300 May 5 Paid for miscellaneous office supplies in the amount of $53.22 May 9 Reimbursed Human Resource Manager for business lunch,$45.09 May 15 Paid for minor landscaping services,$75.00 May 22 Paid $65.00 for postage May 31 Counted remaining cash and discovered that $56.34 remained The company decided to increase the petty cash balance to $450.Prepare the journal entry to increase the fund on May 31.