Exam 8: Internal Control and Cash

For each petty cash payment,the custodian prepares a petty cash ticket.

For good controls over cash payments,the person who orders goods from a supplier should always be different from the person who approves the payment.

The petty cash fund had an initial imprest balance of $220.It currently has $18 in cash,$5 in miscellaneous petty cash tickets,and an additional $191 in specific petty cash tickets.The debit to Cash Short & Over would be ________.

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.

In a bank reconciliation,a book error will be shown on the bank side of the reconciliation.

A company check for payment must be signed by ________.

Which of the following statements about internal control is TRUE?

The petty cash fund has a current balance of $250,which is the established fund balance.Based on activity in the fund,it is determined that the balance needs to be changed to $600.Which journal entry is needed to make this change?

If a company does not protect its assets,it is throwing away resources.

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 permanent difference.

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

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

List and briefly discuss the five components of internal control.

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.

A check was written by a business for $549 but was recorded erroneously in the Cash account as $459.How would this error be included on the bank reconciliation?

Which one of the following is TRUE of the bank reconciliation?

In a bank reconciliation,a NSF check will be shown on the book side of the reconciliation.

The following information is needed to reconcile the cash balance for Natural Landscaping Services. Based on this information,prepare a bank reconciliation for Natural Landscaping Services as of February 28,2019.

Checking accounts and money market accounts are examples of cash equivalents.

Which of the following statements describes a receiving report?