Exam 6: Cash and Internal Control

Which internal control procedure is followed when the work of one department acts as a check on the work of another?

Most annual reports now include a report of management to the stockholders. In this report, which group has the primary responsibility for the preparation and integrity of the financial statements?

controls within a company are more concerned with efficient operations and the adherence to management policies than with the accurate reporting of financial information.

Which of the following is an example of a credit memorandum?

On bank reconciliation, outstanding checks are added to the cash balance per the bank statement.

Which one of the following statements is true?

The key to the classification of an amount as cash is that it be available to pay debts within a three-month period of time.

Which one of the following would not appear on a bank statement for a checking account?

describes a form used by the accountant to reconcile the balance shown on the bank statement for a particular account with the balance shown in the accounting records.

Which one of the following is not a cash equivalent?

If a credit memo appears on a bank reconciliation, this could be an indication that:

Latahmer Corporation is reconciling its May bank account. For each item listed, state how it would be handled on the bank reconciliation. -Check written on the company's account and paid by the bank is returned with the bank statement

The following set of items describes activities completed by a company in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. Cash register tapes are picked up daily by an employee from the accounting department.

The only reason a company needs to create an internal control system is to deter intentional fraudulent acts.

Why are adjustments often necessary after the reconciliation of a bank account?

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. Checks are signed by designated officers in the finance department.

Match the following terms with the best definitions for questions 212 through 219. -An example of independent verification.

Which one of the following is considered one of the six most important categories of internal control procedures?

Typically the classification known as readily available refers to investments that are converted into cash in _______________ months or less.

are the crucial link between economic transactions entered into by an entity and the accounting for these events.