Exam 6: Cash and Internal Control

Which one of the following could never be considered to be cash equivalents?

A(n) _______________ is a form sent by the seller to the buyer as evidence of a sale.

The use of customer statements as a control device will be effective only if the employees responsible for the custody of cash received through the mail, for record keeping, and for authorization of adjustments to customers' accounts are not allowed to prepare and mail statements to customers.

The treasurer for Rahm Corp.was preparing a bank reconciliation as of September 30, 2016.The following items were identified: Rahm's book balance \ 32,800 Deposits in transit 4,300 Outstanding checks 2,200 Interest earned on checking account 100 Customer's NSF check returned by the bank 400 ? Rahm Corp.'s adjusted cash balance at September 30, 2016 is

A debit memorandum appeared on Cinco Inc.'s May bank statement.How will Cinco treat this amount on its May bank reconciliation?

____________________ controls primarily concern safeguarding of assets and ensuring the reliability of the financial statements.

Match Latahmer Corporation is reconciling its May bank account. For each item listed, state how it would be handled on the bank reconciliation. -Service charge on the May bank statement for new checks

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

Audit committees are required to consist of only directors who are key officers of the company.

The accountant for Busch Corp.was preparing a bank reconciliation as of February 28, 2016.The following items were identified: Busch's book balance \ 15,000 Outstanding checks 2,500 Service charge 15 Customer's NSF check returned by the bank 100 ? What amount will Busch report as its adjusted cash balance at February 28, 2016?

Match the term with the statement that best defines it. -Procedures concerned with safeguarding the assets or the reliability of financial statements.

The bank informs a customer that a service charge has been assessed on their account by including a credit memorandum in the monthly 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. A single employee in the mailroom opens the mail, counts the money received, and prepares a control list of the amount received.

Taylor Corp.identified the following data in preparing a bank reconciliation on October 31, 2016. Bank statement balance \ 29,600 Taylor's book balance (before adjustments) ? Outstanding checks 3,100 NSF checks 300 Service charges 200 Deposits in transit 2,200 Interest earned on checking account 100 ?? What is the net amount of the adjustments to Taylor's cash balance as a result of the bank reconciliation?

How would outstanding checks be dealt with in a bank reconciliation?

If collection of accounts receivable is assured, then accounts receivable are considered to be cash equivalents.

The department in an organization that is responsible for preparing the invoice approval form to document all of the information about a particular purchase is:

Which internal control procedure is followed when management authorizes the purchasing department to order goods and services for the company?

If a company records a $310 receipt as $130, this type of error is called a(n) ____________________.

Match the following terms with the best definitions for questions 212 through 219. -A form used for verification that the items originally requested have been received.