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Exam 7: Internal Control and Cash

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Question 21

Multiple Choice

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The amount of deposits in transit is included on the bank reconciliation as a(n)

A) deduction from the balance per the company's books
B) deduction from the balance per bank statement
C) addition to the balance per bank statement
D) addition to the balance per company books

E) C) and D)
F) All of the above

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Question 22

Multiple Choice

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Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company.This item is a(n)

A) deduction from the balance per company's records
B) addition to the balance per bank statement
C) deduction from the balance per bank statement
D) addition to the balance per company's records

E) C) and D)
F) B) and D)

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Question 23

Multiple Choice

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Credit memos from the bank

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 $200 petty cash fund has cash of $20 and receipts of $177.The journal entry to replenish the account would include a credit to

Which one of the following below is not an element of internal control?

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

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

In preparing a bank reconciliation,the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records.

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

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

A necessary element of internal control is

Gunnar Company gathered the following reconciling information in preparing its September bank reconciliation.Calculate the adjusted cash balance per books on September 30. ​

The bank statement for Gatlin Co.indicates a balance of $7,735 on June 30.After the journal entries for June had been posted,the cash account had a balance of $4,098. ​ ​ Record the appropriate journal entries that would be necessary for Gatlin Co.

Money market accounts,commercial paper,and U.S.Treasury bills are examples of cash equivalents.

Using the following information,prepare a bank reconciliation for Candace Co.for May 31:

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695.What entry is required in the company's accounts?

Gamma Company and Delta Company have compiled the following data as of the end of the current fiscal year: ​ ​ Depreciation (one of the operating expenses)for Gamma was $35,000,and for Delta was $65,000. ​ (1)Calculate days' cash on hand for Gamma Company and for Delta Company.(Round your answer to one decimal place.) ​ (2)Which company has the better liquidity position based on your calculation?

The actual cash received during the week ended October 31 for cash sales was $23,447 and the amount indicated by the cash register total was $23,457.Journalize the entry to record the cash receipts and cash sales.

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