Exam 8: Fraud, Internal Control, and Cash

Identify the internal control procedures applicable to cash receipts for Ferguson Company in each of the following cases. 1. All cashiers are bonded. 2. The treasurer compares the total cash receipts to the bank deposit daily. 3. The bookkeeper records cash receipts which are held by the treasurer. 4. Only the treasurer holds cash receipts. 5. Deposit slips are completed for each deposit.

The entry to replenish a petty cash fund includes a credit to

A check returned by the bank marked "NSF" means

Tunes Company had checks outstanding totaling $12800 on its June bank reconciliation. In July Tunes Company issued checks totaling $78700. The July bank statement shows that $76600 in checks cleared the bank in July. A check from one of Tunes Company's customers in the amount of $1600 was also returned marked "NSF." The amount of outstanding checks on Tunes Company's July bank reconciliation should be

If a petty cash fund is established in the amount of $250 and contains $151 in cash and $95 in receipts for disbursements when it is replenished the journal entry to record replenishment should include credits to the following accounts

A highly automated computerized system of accounting eliminates the need for internal control.

A remittance advice attached to a company check provides

The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.

Hannah Company needs to make adjusting entries for each of the following reconciling items. Identify the account to be debited and the account to be credited in each case. 1. A check for $172 written to the company by J. Chandler was returned NSF. 2. The monthly service charge by the bank was $18. 3. The bank collected a $2000 note plus interest of $200 on the company's behalf. The company had not accrued the interest.

An exception to disbursements being made by check is acceptable when cash is paid

Which of the following would not be reported on the balance sheet as a cash equivalent?

Related selling activities do not include

Which one of the following is not an objective of a system of internal controls?

Checks from customers who pay their accounts promptly are called outstanding checks.

A petty cash fund of $100 is replenished when the fund contains $5 in cash and receipts for $91. The entry to replenish the fund would

A petty cash fund should not be used for

Storing cash in a company safe is an application of which internal control principle?

From an internal control standpoint the asset most susceptible to improper diversion and use is

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