Exam 7: Internal Control and Cash

The following information is needed to reconcile the cash balance for Woods Paper Products. • A deposit of $5,794.62 is in transit. • Outstanding checks total $1,533.25. • The book balance is $5,695.62. • The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent. • The bank balance at February 28,2008 was $16,500.25. • A deposit of $300 was credited by the bank for $3,000. • A customer's check for $1,280 was returned for nonsufficient funds. • The bank service charge is $70. - Which of the following journal entries is needed to adjust for the booking error? A) Cash 13,716 Sales revenue 13,716 B) Rent expense 15,240 Cash 1,524 C) Cash 13,716 Rent expense 13,716 D) Booking error 1,524 Cash 1,524

An outstanding check is a check issued by the company and recorded on its books,but not yet paid by its bank.

When a check is issued,the party being paid the cash is referred to as the:

A check was written by a business for $329,but was recorded erroneously in the cash ledger as $239.How would this error be included on the bank reconciliation?

If a system of internal controls is properly designed and structured,it cannot be overcome or broken into.

If a single person is authorized to both order goods and approve payments,the company may be defrauded in several ways.Which of the following scenarios would NOT be a possible consequence of this control weakness?

Which of the following is NOT included in a voucher?

Please refer to the following bank reconciliation: BANK Balance, June 30,2014 \ 10,241.43 ADD: Deposit in transit 5,113.40 LESS: Outstanding Check\# 506 (1,948.52) Outstanding Check\# 510 (1,800.25) Adjusted balance, June 30,2014 BOOK Balance, June 30,2014 \ 9,745.06 ADD: Note collected by bank 1,900.00 Interest revenue 75.00 LESS: NSF check (79.00) Bank service charge (35.00) Adjusted balance, June 30,2014 -Please prepare the adjusting entry for the second reconciling item (interest revenue.)

The Public Company Oversight Board oversees the work of auditors of public companies.

Which of the following would be included in a journal to record an NSF check?

Mandatory vacations and job rotation improve internal control.

A company's cash ledger shows an ending balance of $5,000.Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500),two outstanding checks totaling $720,a service charge of $15,a deposit in transit of $180,and interest revenue of $21.What is the adjusted book balance?

In reconciling a bank statement,the bank balance is $1000 and the checkbook balance is $1205.Which of the following is the MOST probable reason why the checkbook balance is larger than the bank balance?

The bank recorded a $2,000 deposit as $200.How would this information be included on the bank reconciliation?

Which of the following describes the internal control procedure competent,reliable and ethical personnel?

For strong controls over cash receipts,the checks to be deposited should be sent to the treasurer and the remittance advices should be sent to the accounting department.

Which of the following should the purchasing agent NOT be able to do?

A system where customers send their checks directly to the company's bank account is described as which of the following?

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

Which of the following would be included in the entry to record the replenishment of a petty cash fund?