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Exam 7: Sarbanes-Oxley,internal Control,and Cash

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Question 21

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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. $\begin{array}{llll}& \underline {\text { Reg.\#1 }} & \underline {\text { Reg. \#2 }} & \underline {\text { Reg. \#3 }} & \underline {\text { Reg. \#4 }} \\\text { Cash in drawer }&\$ 974.50 & \$ 1,383.66 & \$ 939.46 & \$ 1,137.91 \\\text { Sales reading }&\$ 879.50 & \$ 1,298.16 & \$ 839.46 & \$ 1,030.33\\\hline \text { Difference }\end{array}$ Record the journal entries for EACH cash register to determine the cashier's accuracy.

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Each cash drawer starts with $100.This m...

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Question 22

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The ratio of cash to monthly cash expenses includes both cash and cash equivalents in the numerator.

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Question 23

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Credit memos from the bank

A voucher is usually supported by

The petty cash fund eliminates the need for a bank checking account.

A bank reconciliation should be prepared periodically because

In preparing a bank reconciliation,the amount of deposits in transit is deducted from the balance per bank statement.

The last custodian of the petty cash fund was hospitalized and you have been asked to take stock of the fund and replenish it.When you receive the fund,it has $299 in cash and receipts as follows: $\begin{array}{llcc} \text { Office supplies } & \$ 295 \\ \text { Advertising } & 120 \\\text {Transportation by Taxi} & 75 \\\end{array}$ The petty cash fund was established to have $800 in it. Based on what you have found,what journal entry should be recorded to replenish the fund?

A necessary element of internal control is

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer.What entry is required in the company's accounts?

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

In preparing a bank reconciliation,the amount indicated by a debit memo for bank service charges is added to the balance per company's records.

The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control.

The cash account in the company's ledger is an

Which of the following should not be considered cash by an accountant?

Accompanying the bank statement was a debit memo for an NSF check received from a customer.This item would be included on the bank reconciliation as an

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

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 bank reconciliation is an important part of the system of internal controls.

Cash equivalents include short-term investments that will be converted to cash within 120 days.