Exam 6: Reporting and Analyzing Cash and Internal Controls

A company made a bank deposit on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

A remittance advice is:

When a petty cash fund is in use:

The entry necessary to establish a petty cash fund should include:

On a bank reconciliation,an unrecorded debit memorandum for printing checks is:

The main principles of internal control include which of the following:

In Year 1 a company had net sales of $50,000 and ending accounts receivable of $2,000.In Year 2 this company had net sales of $80,000 and ending accounts receivable of $4,000.Use days' sales uncollected to determine which of the following statements is true

Assume that cash sales according to the register file total $705 but the amount of cash in the register is $685.This cash shortage of $20 represents a Miscellaneous Expense.

What is a voucher system?

Assume that at the end of the day,the cash register tape shows a balance of $635.However,the cash drawer has a balance of $650,this difference should be debited to Miscellaneous Expense.

Cancelled checks are checks the bank has paid and deducted from the customer's account during the period.

When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables often translates into increased profitability.

Technology such as cash registers,check protectors,time clocks and personal identification scanners can increase the strength of internal controls.

The following information is available to reconcile Sleepy Time Bedding's book balance of cash with its bank statement cash balance as of July 31: a. On July 31 , the compary's Cash accourt has a $\$ 25,862$ debit balarce, but its July barik staternerit shows a $\$ 28,177$ cash balarice. b. Check No. 1531 for $\$ 1,520$ and Check No. 1540 for $\$ 752$ were outstandirig on the Jurne 30 bark reconciliation. Check No. 1540 is listed with the July carnceled checks, but Check No. 1531 is not. Also, Check No. 1565 for $\$ 536$ ard Check No. 1569 for $\$ 2,288$ , both writtenl irl July, are not arnong the carnceled checks on the July 31 staternent. c. In comparing the carnceled checks on the bark staternent with the entries in the accounting records, it is found that Check No. 1556 for July rent was cortectly written ard drawn for $\$ 1,240$ but was erroneously entered in the accourting recards as $\$ 1,230$ . d. A credit memorardurn enclosed with the July barik statement indicates the bark collected $\$ 9,500$ cash on a noniraterest-bearing note for Sleepy Tirne Beddirg, deducted a $\$ 48$ collection fee, and credited the remainder to its account. Sleepy Time Bedding had not recorded this event before receiving the statement. e. A debit menernorandurn for $\$ 805$ lists a $\$ 795 \mathrm { NSF }$ check plus a $\$ 10 \mathrm { NSF }$ charge. The check had been received from a customer, Evarn Shaw. Sleepy Time Bedding has not yet recorded this check as NSF. f. Enclosed with the July statement is a $\$ 14$ debitmemorandum for barik services. It has not yet been recorded because no previous notification had been received. e. Sleepy Time Bedding July 31 daily cash receipts of $\$ 10,652$ were placed in the bark's right depository on that date, but do not appear on the July 31 bark statement. a. On July 31 , the compary's Cash accourt has a $\$ 25,862$ debit balarce, but its July barik staternerit shows a $\$ 28,177$ cash balarice. b. Check No. 1531 for $\$ 1,520$ and Check No. 1540 for $\$ 752$ were outstandirig on the Jurne 30 bark reconciliation. Check No. 1540 is listed with the July carnceled checks, but Check No. 1531 is not. Also, Check No. 1565 for $\$ 536$ ard Check No. 1569 for $\$ 2,288$ , both writtenl irl July, are not arnong the carnceled checks on the July 31 statement. c. In comparing the carnceled checks on the bark staternent with the entries in the accounting records, it is found that Check No. 1556 for July rent was cortectly written ard drawn for $\$ 1,240$ but was erroneously entered in the accourting recards as $\$ 1,230$ . d. A credit memorardurn enclosed with the July barik statement indicates the bark collected $\$ 9,500$ cash on a noniraterest-bearing note for sleepy Tirne Beddirg, deducted a $\$ 48$ collection fee, and credited the remainder to its accourt. Sleepy Time Bedding had not recorded this event before receiving the staternent. e. A debit mennorardurn for $\$ 805$ lists a $\$ 795 \mathrm { NSF }$ check plus a $\$ 10 \mathrm { NSF }$ charge. The check had been received from a customer, Evarl Shaw. Sleepy Time Bedding has not yet recorded this check as NSF. f. Enclosed with the July statement is a $\$ 14$ debitmemorandum for barik services. It has not yet been recorded because no previous notification had been received. g. Sleepy Time Bedding July 31 daily cash receipts of $\$ 10,652$ were placed in the bark's right depository on that date, but do not appear on the July 31 bark statement. What is the appropriate journal entry to record the collection made by the bank?

Pre-numbered printed checks are an example of which internal control principle?

The principles of internal control include: establish responsibilities,maintain adequate records,insure assets,separate recordkeeping from custody of assets and perform regular and independent reviews.

For which item does a bank NOT issue a debit memorandum?

A customer's check is deposited by a company.The check is uncollectible because the balance in the customer's account is not large enough to cover the check.This check is referred to as a __________ check.

The importance of cash is highlighted by the inclusion of a statement of cash flows in a complete set of financial statements,which reports on the changes in cash.