FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Sarbanes-Oxley, Internal Control, and Cash

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

Using the following information, list the items that will require adjustments to the accounts of Salem Co. Also, indicate which accounts will increase or decrease due to the adjustment. (a)The bank statement balance is $\$ 2,597$ . (b)The cash ac count balance is $\$ 2,680$ . (c)Outstanding checks amounted to $\$ 703$ . (d)Deposits in transit are $\$ 732$ . (e)The bank service charge is $\$ 25$ . (f)Interest added to the che cling account by the bank is $\$ 7$ . (g)A check drawn for $\$ 59$ was incorrectly charged by the bank as $\$ 95$ .

Correct Answer

verified

(e)Service charge ; Cash will ...

View Answer

Show Answer

Question 22

Essay

Review LaterAdd Note

Review Later

List the advantages of Electronic Funds Transfers.

Correct Answer

verified

Advantage:
(1) EFTs cost less than recei...

View Answer

Show Answer

Question 23

Essay

Review LaterAdd Note

List the objectives of internal control and give an example of how each is implemented. The objectives of internal control are to provide reasonable assurance that: (1)Assets are safeguarded and used for business puposes. (2)Business information is accurate. (3)Employees comply with laws and regulations.

One of the objectives of internal control is to:

For each of the following procedures, indicate whether it is an internal control strength or a weakness. Also, for each weakness, explain why it is a weakness and how it can be corrected. (a)Only the best ac counting graduates are hired to eliminate the need for training. (b)The person responsible for or dering and receiving supplie s is not pemitted to rec ord or pay for the supplies. (c)Company policy mandates that all employees take vacation time. (d)Internal auditors constantly monitor the internal control system. (e)The accountant deposits cash at least once each day to prevent holding large amounts of cash on hand.

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

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

A check drawn by a depositor for $915 in payment of a liability was recorded in the depositor's book as $195. What adjustment is required in the depositor's accounts?

Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.

In a computerized system, paid vouchers are transferred to a paid voucher file.

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

In preparing a bank reconciliation, the amount of outstanding checks is deducted from the cash balance per books.

What is a special-purpose cash fund? What is its purpose? Give two examples.

The Sarbanes-Oxley Act requires companies and their independent accountants to report on the effectiveness of the company's internal controls.

There are only two internal control objectives: to ensure accurate financial reports, and to ensure compliance with applicable laws.

Cash equivalents include:

A voucher system is an example of an internal control procedure over cash payments.

The bank reconciliation:

All bank memorandums reported on the bank reconciliation require entries in the depositor's accounts.

Employee fraud is the intentional act of deceiving an employer for personal gain.