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Exam 7: Internal Control and Cash

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Question 31

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Businesses who have several bank accounts,petty cash,and cash on hand,would maintain a separate ledger account for each type of cash.

A) True
B) False

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Question 32

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

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Question 33

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

The amount of cash to be reported on the balance sheet at June 30 is the

In preparing a bank reconciliation,the amount indicated by a credit memo for a note receivable collected by the bank is added to the balance per company's records.

For each of the following,explain whether the issue would require you to prepare a journal entry for your company,assuming any original entry is correct.If an entry is required,please include it as part of your answer. (1)The bank recorded your deposit as $91 rather than the actual amount of $191. (2)Two outstanding checks amounted to $450. (3)Company check number 538 for postage was recorded incorrectly by the company bookkeeper as $50 instead of $59. (4)The bank paid a check for $500 after the company had issued a stop payment and voided the check. (5)An EFT deposit was made by one of the company's customers,Atlas Design,for merchandise received.The sale had previously been recorded when shipped and was equal to the payment amount of $125.

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.

A $135 petty cash fund has cash of $18 and receipts of $120.The journal entry to replenish the account would include a

On April 2,Granger Sales decides to establish a $125.00 petty cash fund to relieve the burden on Accounting. ​ (a)Journalize the establishment of the fund. (b)On April 10,the petty cash fund has receipts for mail and postage of $43.50,contributions and donations of $29.50,meals and entertainment of $38.25,and $13.55 in cash.Journalize the replenishment of the fund. ​(c)On April 11,Granger Sales decides to increase petty cash to $200.00.Journalize this event.

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

The actual cash received during the week ended June 7 for cash sales was $18,632,and the amount indicated by the cash register total was $18,628.Journalize the entry to record the cash receipts and cash sales. ​ Journal

Accompanying the bank statement was a debit memo for an NSF check received from a customer.What entry is required in the company's accounts?

Internal control does not consist of policies and procedures that

Money orders are considered cash.

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.

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement.An example of a credit memo is

The debit recorded in the journal to reimburse the petty cash fund is to

On April 3,Snappy Sales decides to establish a $135.00 petty cash fund to relieve the burden on Accounting. (a)Journalize the establishment of the fund. (b)On April 11,the petty cash fund has receipts for mail and postage of $32.75,contributions and donations of $25.25,meals and entertainment of $68.00,and $9.75 in cash.Journalize the replenishment of the fund. (c)On April 12,Snappy Sales decides to increase petty cash to $175.00.Journalize this transaction.

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.

Journal entries based on the bank reconciliation are required in the company's accounts for