Exam 8: Internal Control and Cash

Aspen,Inc.reported the following data in its annual report:​Cash and cash equivalents $460,000Cash flow from operations (240,000)​Required (1)What is the company's "cash burn" per month? (2)What is the company's ratio of cash to monthly cash expenses?

A minimum cash balance required by a bank is called

A voucher is a written authorization to make a cash payment.

Most companies that have several bank accounts,petty cash,and cash on hand would list each separately on the balance sheet.

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation. -Bank service charge

Match each item to a bank statement adjustment, a company books adjustment, or either. -NSF check

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times.Present entries to record the transactions for each of the two days of cash receipts from sales.

Minor Company had checks outstanding totaling $19,200 on its April bank reconciliation.In May,Minor Company issued checks totaling $64,900.The May bank statement shows that $47,600 in checks cleared the bank in May.A check of $300 from one of Minor Company's customers was also returned marked "NSF." The amount of outstanding checks on Minor Company's May bank reconciliation should be

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

The following data were gathered to use in reconciling the bank account of Savannah Company:​ What is the adjusted balance on the bank reconciliation?

Separating the responsibilities for purchasing,receiving,and paying for equipment is an example of the control procedure: separating operations,custody of assets,and accounting.

Roper Electronics received its bank statement for the month of August with an ending balance of $11,740.Roper determined that Check No.613 for $155 and Check No.601 for $420 were both outstanding.Also,a $6,900 deposit for August 30 was in transit as of the end of the month.Northern Regional Bank also collected a $5,000 notes receivable on August 1 that was issued March 1.Accrued interest is $250.Northern Regional Bank charged a $35 fee for the collection service.The bank statement reveals a bank service charge of $20.A customer check for $68 was returned with the bank statement marked "NSF." The ending balance of the Roper cash account is $12,938.​Prepare a bank/account reconciliation and any necessary journal entries for the reconciliation.

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

Sarbanes-Oxley's purpose is to maintain public confidence and trust in the financial reporting of companies.

List and define each of the five elements of internal control.

Match each item to a bank statement adjustment, a company books adjustment, or either. -Outstanding checks

For efficiency of operations and better control over cash,a company should maintain only one bank account.

Match the following elements of internal control: -Risk assessment