Exam 7: Internal Control and Cash

If the bank reconciliation includes interest revenue,a journal entry is required which debits Cash and credits Interest revenue.

A petty cash fund was established with a $400 balance.It currently has cash of $10 and petty cash tickets as shown below. Travel expense \ 120 Office supplies \ 200 Equipment rental expense \ 70 The journal entry to replenish the account would be which of the following:

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. - Based on this information,complete a bank reconciliation,in the format below,for Woods Paper Products as of February 28,2013. BANK BOOK

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

Which of the following is NOT one of the purposes of internal control?

A petty cash fund was established with a $300 balance.It currently has cash of $78 and petty cash tickets totaling $222 for travel expense.Please provide the journal entry to record the replenishment of the account.

A petty cash fund was established with a $250 balance.It currently has cash of $31 and petty cash tickets totaling $219.Which of the following would be included in the entry to replenish the fund?

A check was written by a business for $205,but was recorded in the cash payments journal as $502.How would this error be included on the bank reconciliation?

The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

A check of $75 deposited by a company was returned to the bank for nonsufficient funds.How would this information be included on the bank reconciliation?

In the following situation,which internal control procedure needs strengthening? - The controller's duties include approving bank reconciliations,approving general journal entries,hiring administrative staff,and approving various types of administrative expenses.She needs new computer equipment for the accounting office,but there are no guidelines specifying whether she can approve purchases of office equipment.

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 -No journal entries are required for the reconciling items on the bank side because:

Journal entries that are necessitated by reconciling items on the book side of the reconciliation all include either a debit to Cash or a credit to Cash.

In a bank reconciliation,an NSF check will be shown on the bank side of the reconciliation.

Which is NOT a provision of Sarbanes-Oxley?

Which of the following is TRUE of internal control?

Around the end of the year,an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of goods sold,and thus a higher net income.This action would be considered unethical because it is not a legitimate business transaction.

Which of the following is NOT a key element of good internal control?

The bank charged a service fee of $20.How would this information be included on the bank reconciliation?

The journal entry to open a new petty cash fund includes a debit to the petty cash account and a credit to cash in bank.