Exam 6: Reporting and Analyzing Cash and Internal Controls

All disbursements from petty cash should be documented by a petty cash receipt.

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

________________________ refers to a company's ability to pay for its short-term obligations.

The use of internal controls provides guaranteed protection against losses due to operating activities.

Assume that a buyer receives a shipment of MODEL SD010 with an invoice amount of $780,although $870 worth of goods were received.The purchase order was for $870.Since the difference was in the buyer's favor,the buyer's purchasing department should authorize payment of $780.

A check that was outstanding on last period's bank reconciliation was not included with the cancelled checks returned by the bank this period.As a result,in preparing this period's reconciliation,the amount of this check should be:

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 Prepare the journal entry to reimburse the fund on May 31.

An employee is __________ when a company purchases an insurance policy against losses from theft by that employee.

Two sales clerks should not share the same cash register.This refers to the internal control principle of _______________________.

The internal controls of cash receipts aims to ensure that all cash received is properly recorded and deposited.

Basic bank services such as bank accounts,bank deposits and checking contribute to the control and safeguarding of cash.

Kim Jordan of New Belgium Brewing Company maintains a system of internal controls and managing cash.Identify some of these internal controls and explain how they contribute to the success of the company.

A company established a petty cash fund in February of the current year and experienced the following transactions affecting the fund during February: Feb. 1 Established a \ 250 petty cash fund. 5 Paid \ 55 to acquire office supplies. 8 Reimbursed the company controller for \ 30 spent on beverages for recruits. 18 Paid \ 45 for postage. 20 Paid \ 65 for C.O.D. charges on merchandise inventory. 25 Paid \ 50 for janitorial services. 28 When sorting the petty cash receipts to replenish the fund, the custodian noted that there was \ 245 in receipts and \ 10 cash remaining. Also, a decision was made to reduce the fund to \ 200 in total. Prepare the journal entry to reimburse the fund and to reduce its amount on February 28.

The internal document that is prepared to notify the appropriate persons that ordered goods have been received and describes the quantities and condition of the goods is the

In order to streamline the purchasing process,department managers should place orders directly with suppliers.

An internal control system refers to the policies and procedures managers use to __________,ensure reliable accounting,promote efficient operations and urge adherence to company policies.

Proper internal control means that the responsibility for a task is clearly established and assigned to one person.

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

Mattel had net sales of $4,235 million and ending accounts receivable of $775 million its days' sales uncollected is equal to:

Define an internal control system and describe the purpose that it serves.