Exam 6: Cash and Internal Control

Lower Enterprises invested its excess cash in the following instruments during December 2014: Determine the amount of cash equivalents that should be combined with cash on the company's balance sheet at December 31, 2014, and for purposes of preparing a statement of cash flows for the year ended December 31, 2014.

Sarcon Corp. prepares monthly bank reconciliations of its checking account balance. REQUIRED: 1 Explain how checking accounts, bank statements, and bank reconciliations are used by Sarcon to control its cash. 2 Explain how Sarcon can control small payments that must be made in cash rather than by check.

Which of the following statements is false regarding a credit memorandum?

McDonald's Corporation is the largest food service organization in the world. The proper handling of cash and food is important to the profitability of McDonald's. Based on your personal knowledge of McDonald's and the internal control concepts and procedures described in the textbook, answer the following questions. REQUIRED: Describe procedures that you believe McDonald's may use to control the purchase and payment of food products.

What rational is used in order to determine if an amount is 'cash'?

Among the assets listed below, which one is considered the most liquid?

When a bank pays interest or collects an amount owed to a company by one of the bank's customers, the bank issues a debit memorandum.

Which of the following is not a requirement of Sarbanes-Oxley?

The accountant for Casa Corp. was preparing a bank reconciliation as of February 28, 2014. The following items were identified: There was an error in recording a customer's check as the check was recorded by Casa as $110, but the correct Amount of $101 was recorded by the bank. Casa's adjusted cash balance at February 28, 2014 is

The documentation with the bank statement shows a debit memo for bank service charges. Identify the effects of the transaction on the company's accounts.

Match the following terms with the best definitions for questions 212 through 219. -Typically sent along with a remittance advice.

Most merchandisers receive checks and currency from customers in two ways: 1 cash received over the counter from cash sales and 2 cash received in the mail from credit sales.

Deposits made by a company but not yet reflected in a bank statement are called

Match the term with the statement that best defines it. -Controls that are focused more on efficient operation than with correct reporting of information.

Checks received from customers are considered to be cash in the company's books.

Match the action with the category of internal control procedures -Proper authorization

Administrative controls

A check written by a company but not yet presented to the bank for payment is called an _________________________.

The following set of items describes activities completed by a company in purchasing and paying for merchandise. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. The receiving department compares the quantity received with the quantity printed on the receiving report when the purchase order was prepared.

Each of the following documents is used in the control of cash disbursements except: