Exam 4: Internal Control and Cash

Dreammaker Kitchens The following information relates to the company's November bank reconciliation: Bank statement balance \ 10,700 Unadjusted cash balance from the companys records ? Deposit in trensit 2,100 Outstanding checks 1,200 Bank service charges 300 Interest earned on the bank account 100 Customen's NSF check returned by the bank 400 -Refer to Dreammaker Kitchens.As a result of the bank reconciliation process,what is the net increase or decrease in cash which must be recorded on the company's books?

If a company has an internal audit function,it does not need to have external auditors.

Which of the assets listed below is considered the most liquid?

Designs on You The following information relates to the company's May bank reconciliation: Bank statement balance \ 5,000 Unadjusted cash balance from the company records ? Deposit in trensit 1,000 Outstanding checks 500 Bank service charges 50 Interest earned on the bank account 10 Customen's NSF check returned by the bank 25 In addition,a check was recorded in the accounting records as $1,200 but the correct amount as recorded by the bank was only $1,000. -Refer to Designs on You.What is the unadjusted cash balance according to the company's records May 31st?

A physical count of inventory is required even though the company uses the perpetual inventory system.This is an example of which of the following internal control activities?

Which internal control activity is followed when inventory storage areas are secured with limited access?

Internal control over financial reporting is concerned with ensuring the reliability of the financial statements.

Which of the following is not included in Cash and Cash Equivalents on a company's balance sheet?

Which of the following items would not be a reconciling item on a bank reconciliation?

Dance Town Academy The items listed below were identified while preparing a bank reconciliation for the company's checking account as of March 31,2013. Cash balance according to the general ledger ? Bank statement balance \ 18,500 Outstanding checks 2,700 Customer's bounced check 350 Bank service charges 100 Deposits in transit 1,000 Interest earned on the checking account 60 -Refer to Dance Town Academy.How will the interest earned on the checking account be handled on a bank reconciliation?

Dance Town Academy The items listed below were identified while preparing a bank reconciliation for the company's checking account as of March 31,2013. Cash balance according to the general ledger ? Bank statement balance \ 18,500 Outstanding checks 2,700 Customer's bounced check 350 Bank service charges 100 Deposits in transit 1,000 Interest earned on the checking account 60 -Refer to Dance Town Academy.How will the bank services charges be handled on a bank reconciliation?

Which internal control activity is followed when the work of one department acts as a check on the work of another?

If a company hires honest employees and its top management acts with integrity,no internal control procedures will be necessary.

While preparing the February 28th bank reconciliation,the accountant identified the following items: Company's balance according to the general ledger \ 23,100 Outstanding checks 550 Interest earned on the checling account 100 A customer's NSF check retune d by the bank 1,000 In the process of preparing the reconciliation,the accountant discovered an error in recording a customer's check;the amount was incorrectly recorded on the books as a cash receipt of $600,while the bank correctly recorded the amount as $650.What is the company's adjusted cash balance on February 28th?

Which of the following procedures is incorrect for establishing and maintaining a petty cash fund?

During April,Downtown Iron Works engaged in the following transactions involving it petty cash fund: Apri1 1 Established the petty cash fund by issuing a check to the fund s custodian \ 250 April 4 The custodian paid for freight charges on new equipment 125 April 13 The custodian paid for postage services on the mailing of blueprints. 50 Apri1 21 The custodian paid for office supplies. 25 April 25 The custodian requested reimbursement of the petty cash expenditures during the month and ? recerves a check to replerish the fund. Prepare the journal entries necessary to record the company's petty cash transactions.

If a company erroneously records a $500 deposit as $50 in its records,which of the following must occur when reconciling its bank statement?

While preparing a bank reconciliation,which of the following items would be subtracted from the balance per the bank statement?

A debit memo may be issued in the monthly bank statement in order for the bank to notify a company that a service charge has been assessed on the company's account.

When there is proper segregation of duties,the likelihood of fraud is reduced so that an employee attempting to carry out a fraudulent scheme would have to work in ____________________ with another employee.