Exam 4: Internal Control and Cash

The account which records differences between amounts of cash deposited and amounts from the cash register tapes is called

A(n)____________________ is the process used by an accountant to ensure consistency between the balance shown on the bank statement for a particular account and the balance shown on the accounting records.

A company's unadjusted bank balance is $3,000.Outstanding checks amount to $500 and deposits in transit total $300.Based on this information alone,what is the company's adjusted cash balance for the purpose of preparing a bank reconciliation?

A company's bank statement balance shows that there is $4,190 in the checking account at the end of the month.Comparing the company's records with the bank statement reveals several additional items,such as outstanding checks of $1,860,deposits in transit of $2,080,an NSF check of $209,interest earned of $21.52,a bank service charge of $40,and a check for $120 recorded twice by the company.Calculate the adjusted cash balance for this checking account.

Which one of the following would never be considered a cash equivalent?

Which of the following is a reconciling item on the bank side of a bank reconciliation?

In anticipation of preparing the July bank reconciliation,the accountant gathered the following information: Bank statement balance \ 4,300 Deposit in transit 500 Outstanding checks 300 Bank service charges 10 Customer's NSF check returned by the bank 50 What is the company's adjusted cash balance at July 31st?

An amount recorded as an increase in the company's cash account at the end of the period,but which has not yet been reflected on the bank statement is called a(n)____________________.

The amount of cash in the cash register from sales totals $534.The amount for sales recorded on the cash register tape was $530.Which journal entry is required?

The elapsed time between the purchase of goods for resale and the collection of cash from customers is referred to as the ____________________ cycle.

Cash collected and recorded by a company but not yet reflected in a bank statement are known as

On a bank reconciliation,outstanding checks are added to the cash balance per the bank statement.

When a bank pays interest on a company's checking account balance,the bank will likely issue a credit memo.

The accountant preparing the January bank reconciliation identified the following items: Cash balance per company records \ 35,900 Outstanding checks 12,050 Interest earned on the checking account 75 Customer's NSF check returned by the bank 325 There was also an error in the accounting records whereby a customer's check for $101 was recorded as $110.What is the company's adjusted cash balance at January 31st?

A good system of internal control requires that the physical custody of assets be separated from the accounting for those assets.This concept is known as safeguarding of assets and records.

The accounting records for Durden Rentals shows a cash balance of $13,676 on March 31,2012.On the evening of March 31,company receipts of $3,250 were placed in the bank's night deposit drop box;this deposit was processed by the bank on April 1.The March 31 bank statement shows balance of $9,866,including a service charge of $45,an NSF check from a customer for $210,and a $650 debit memo for the payment of the company's utility bill.All of the checks that the company had written during March were listed on the bank statement except for check #2156 in the amount of $345. Prepare a bank reconciliation to calculate the company's adjusted cash balance at March 31,2012.

The accounting records for Dutch Island Company shows a cash balance of $4,133 on January 31,2012.On the evening of January 31,company receipts of $1,250 were placed in the bank's night deposit drop box;this deposit was processed by the bank on February 1.The January 31 bank statement shows balance of $8,876,including collection of a $5,000 note receivable plus $55 of interest earned,a service charge of $40,and a $550 debit memo for the payment of the company's utility bill.All of the checks that the company had written during January were listed on the bank statement except for check #731 in the amount of $1,528. Prepare a bank reconciliation to calculate the company's adjusted cash balance at January 31,2012.

Money market accounts with original maturities of less than 90 days are cash equivalents.

The accountant prepared the firm's bank reconciliation and noted the following adjustments to the company records for its checking account.In the table below,indicate the impact on the accounting equation of recording the various adjusting journal entries for these items by inserting an "I" for increase or "D" for decrease.It is possible that an adjustment both increases and decreases an element of the accounting equation,as in the case of the first adjustment which has been completed as an example. Stockholders 1. NSF checks I, D 2. Check for utilities recorded twice by the company 3. Interest earned 4. Bank service charges 5. Bank debit memos for payment of rent 6. Bank credit memos for collection of a note receivable

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