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

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Question 81

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

A) True
B) False

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Question 82

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Sarbanes-Oxley's purpose is to improve financial reporting.

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B) False

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Question 83

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Identify each of the following reconciling items as an addition to the cash balance according to the bank statement, deduction from the cash balance according to the bank statement, an addition to the cash balance according to the company's records, or a deduction from the cash balance according to the company's records. Assume that none of the transactions reported by bank debit and credit memos have been recorded by the company. Also, indicate by writing (Entry) those items that will require a journal entry in the company's accounts.

Entries are made to the Petty Cash account when

The term cash includes

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

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

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

Present entries to record the following transactions:

Meredith Company gathered the following reconciling information in preparing its May bank reconciliation:

Journalize the entries to record the following: Jun 1 Established a petty cash fund of $200 Jun 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; miscellaneous $20. Record any discrepancy in the cash short and over account. Journal

A $150 petty cash fund has cash of $44 and receipts of $93. The journal entry to replenish the account would include a

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

The reconciliation of the cash register tape with the cash in the register is an example of

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

Following the completion of the bank reconciliation, an adjusting entry was made that debited cash and credited Interest Revenue. Therefore the bank reconciliation must have included an item that was

Accompanying a bank statement for Marsh Land Properties is a credit memo for payment on a $15,000 note receivable that had been collected by the bank. The rate of interest on the note is 6%. Marsh Land Properties had been notified by the bank at the time of collection, but had made no entries. Journalize the entry that should be made by Marsh Land to bring the accounting records up to date.

A backlog in recording transactions is an example of a warning sign from the accounting system.

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

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