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Exam 7: Internal Control and Cash

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Question 61

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Match the following elements of internal control: -control environment A)provides reasonable assurance that business goals will be achieved B)used by management for guiding operations and ensuring compliance with requirements C)overall attitude of management and employees D)used to locate weaknesses and improve controls E)identify, analyze and assess likeliness of vulnerabilities

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Question 62

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The debit balance in Cash Short and Over at the end of an accounting period is reported as

A) an expense on the income statement
B) income on the income statement
C) an asset on the balance sheet
D) a liability on the balance sheet

E) B) and D)
F) None of the above

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Question 63

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Journalize the entries to record the following: June 1 Established a petty cash fund of $200.30 The amount of cash in the petty cash fund is now $57. The fund is replenished based on the following receipts: postage, $25; entertainment, $100; and miscellaneous, $20. Record any missing funds in the cash short and over account.Journal

The bank reconciles its statement to the company's records.

(a) Where are cash equivalents disclosed in the financial statements? (b) List three examples of cash equivalents.

Which of the following would be subtracted from the balance per bank on a bank reconciliation?

The Scharf Company is a retailer located in a state without sales tax. The following data was given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change. Record the journal entries for EACH cash register to determine the cashier's accuracy.

The following information is from Madison Corporation's accounting records for May. Check #3269 was returned as a double payment and voided. Checks that have not cleared the bank include #3252, #3260, and series #3275-3278. In addition to the above list of the checks, Madison had check #2264 for $32.98 and check #2655 for $45.99 outstanding previously that have not cleared.1. Create an outstanding checks list for Madison at the end of May.2. What is the total amount of checks that cleared the bank (written in May)?

Consider the following information taken from the cash account. Assume cash payments were 80% of collections. How much was the beginning balance of the cash account?

A minimum cash balance required by a bank is called

Describe the features of a voucher system and list typical supporting documents for a voucher.

Which of the following is a reason that businesses use bank accounts as part of their internal control measures.

The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges.

Jamison Company gathered the following reconciling information in preparing its June bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for Jamison Company.

Consider the following journal entry made by Jones Company for one day's sales of a single cashier. Upon investigation, what might you find happened to create this amount of Cash Over/Short account difference? Give three possible reasons for this difference.Cash 2,235.00 Cash Short and Over 100.00 Sales 2,135.00

A business that requires all cash payments be made by check can not use a petty cash system.

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.(a)Actual cash in cash register, $5,412.36; cash receipts per cash register tally, $5,413.07.(b)Actual cash in cash register, $3,712.95; cash receipts per cash register tally, $3,712.16.

The objectives of internal control are to

Which one of the following is not a factor that influences a business's control environment?

In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.