Exam 6: Reporting and Analyzing Cash and Internal Controls

Deposits made and recorded by the depositor but not yet recorded on the bank statement are called _______________________.

The use of electronic communication to transfer cash from one party to another is called __________________________________.

A ________________ fund is used to make cash disbursements of small amounts to avoid the time and cost of writing checks.

The __________ requires the managers and auditors of companies whose stock is traded on an exchange (called public companies) to document and certify the system of internal controls.

On a bank reconciliation, an unrecorded debit memorandum for printing checks is:

Collusion is a form of fraud where two or more individuals collaborate to circumvent separation of duties.

The ________________________________ account is used to record the effects of cash overages and shortages from errors in making change or managing a petty cash fund.

Define an internal control system and describe its purpose.

A company reported net sales for 2016 of $265,000 and $545,000 for 2017. The year-end balances of accounts receivable were $39,000 for 2016 and $92,000 for 2017. Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

Which internal control principle prescribes the use of pre-numbered printed checks?

Cash, not including cash equivalents, includes:

Norman Co. had $5,925 million in sales and $1,155 million in ending accounts receivable for the current period. For the same period, Opal Co. reported $5,885 million in sales and $790 million in ending accounts receivable. Calculate the days' sales uncollected for both companies as of the end of the current period and indicate which company is doing a better job in managing the collection of its receivables.

Meng Co. establishes a $250 petty cash fund on January 1. On January 8, the fund shows $68 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $49; and miscellaneous expenses, $59. Meng uses the perpetual system in accounting for merchandise inventory. The journal entry to reimburse the fund on January 8, is:

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

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

The entry to establish a petty cash fund includes:

What is a voucher system and what are the two areas for which it establishes control procedures?

The following information is available to reconcile Dibble Co.'s book balance of cash with its bank statement cash balance as of April 30. The April 30 cash balance according to the accounting records is $68,356, and the bank statement cash balance for that date is $73,525. a. The bank erroneously cleared a $480 check against the account in April that was not issued by Dibble. The check documentation included with the bank statement indicates the check was actually issued by Flushing Co. b. On April 30, the bank issued a credit memorandum for $53 interest earned on Dibble's account. c. When the April checks are compared with entries in the accounting records, it is found that Check No. 1828 had been correctly drawn for $1,530 to pay for advertising but was erroneously entered in the accounting records as $1,350. d. A credit memorandum indicates that the bank collected $10,000 cash on a note receivable for Dibble, deducted a $30 collection fee, and credited the balance to the company's Cash account. Dibble did not record this transaction before receiving the statement. e. A debit memorandum of $895 is enclosed with the bank statement for an NSF check for $870 received from a customer. The bank assessed a $25 fee for processing it. f. Dibble's April 30 daily cash receipts of $5,102 were placed in the bank's night depository on that date, but do not appear on the April 30 bank statement. g. Dibble's April 30 cash disbursements journal indicates that Check No. 1837 for $584 and Check No. 1840 for $1,219 were both written and entered in the accounting records, but are not among the canceled checks. 1. Prepare the bank reconciliation for this company as of April 30. 2. Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of April 30.

The following information is available for Fenton Manufacturing Company at June 30: Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

Cash equivalents: