Exam 6: Cash and Internal Control

The accountant for Darden Corp. was preparing a bank reconciliation as of April 30, 2014. The following items were identified: In addition, Darden made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510. What amount will Darden report as its adjusted cash balance at April 30, 2014?

Pierce Corp. identified the following data in preparing a bank reconciliation on October 31, 2014. What is the net amount of the adjustments to Pierce's cash balance as a result of the bank reconciliation?

Latahmer Corporation is reconciling its May bank account. For each item listed, state how it would be handled on the bank reconciliation. -Interest earned on the checking account for May

Your uncle has just started a business and comes to you with a question. "I'm confused. I have a memo included with my bank statement indicating a $45 service charge for printing new checks. Since you're an accounting major, maybe you can explain to me why they call it a 'debit memorandum,' even though they are deducting this amount from my account. When I took Accounting in school, I could have sworn that a decrease in the Cash account would be a credit and not a debit. REQUIRED: In a short paragraph, explain this issue to your uncle.

On a bank reconciliation, interest earned for the month is added to the cash balance per the books.

One concern of the internal auditor is the efficiency with which the organization is run.

Treasury notes with a maturity of three months or less that are issued by the Federal Government are cash equivalents.

A six-month certificate of deposit would be considered to be a cash equivalent.

An accounting system must be computerized in order to ensure the company has proper internal control.

As part of good internal control, disbursements can be made either by check or cash.

An is a form sent by the seller to the buyer as evidence of a sale.

The audit committee of the board of directors provides direct contact between the ______________________________ and the ________________________________________.

Which one of the following is not a generally recognized internal control procedure?

Which of the following represents the board of director's subset that acts as a direct contact between stockholders and the independent accounting firm?

An is a form sent by the purchasing department to the supplier.

The accountant for Rogan Corp. was preparing a bank reconciliation as of February 28, 2014. The following items were identified: What amount will Rogan report as its adjusted cash balance at February 28, 2014?

While reconciling the checking account, an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company. Sonic recorded the receipt as $729 and the correct amount of the check was $279. What reconciling adjustment is required?

French Corp. began the year with $18,000 in cash and another $6,500 in cash equivalents. During the year, operations generated $132,000 in cash. Net cash used in investing activities during the year was $213,000, and the company raised a net amount of $168,000 from financing activities. REQUIRED: Determine the year-end balance in cash and cash equivalents.

Which of the following is not a generally recognized internal control procedure?

The Dinho Corporation identified the following data when preparing their April bank reconciliation: In addition, Dinho incorrectly recorded a deposit in its books in the amount of $1,000. The correct amount was recorded by the bank as $1,200. What is the net amount of the adjustment to Dinho's cash balance as a result of the bank reconciliation?