Exam 6: Reporting and Analyzing Cash and Internal Controls

Assume that a buyer receives a shipment of MODEL SD010 with an invoice amount of $780,although $870 worth of goods was received.The purchase order was for $870.Since the difference was in the buyer's favor,the buyer's purchasing department should authorize payment of $780.

What is the purpose of the petty cash account?

On August 17,at the end of the day,the cash register's record shows $957,but the count of cash in the register is $965.Prepare the general journal entry to record the day's cash sales.

Fluffy Pet Grooming deposits all cash receipts on the day when they are received and all payments are made by check.At the close of business on June 30,its Cash account shows a $14,811 debit balance.Fluffy Pet Grooming's June 30 bank statement shows $14,472 on deposit in the bank.The following information is available: What is the adjusting journal entry required as a result to record the increase in cash for the adjusted bank balance?

Two limitations of internal control systems are ____________________ and ________________.

Separation of duties divides responsibility for a transaction or a series of transactions between two or more individuals or departments.Separation of duties reduces the risk of error and fraud.

The internal document prepared by a department manager that informs the purchasing department of its needs is the:

The internal document that is prepared by a department manager to inform the purchasing department of its needs is called the ________________________.

Prenumbered printed checks are an example of which internal control principle?

A company reported net sales for Year 1 of $285,000 and $575,000 for Year 2.The year-end balances of accounts receivable were $49,000 for Year 1 and $85,000 for Year 2.Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

In comparing the canceled checks on the bank statement with the entries in the accounting records,it is found that check number 4239 for November's rent was correctly written and drawn for $7,390 but was erroneously entered in the accounting records as $3,790.When reconciling the November bank statement,the company should:

The _________________ account is used to record the effects of cash overages and shortages from errors in making change.

Assume that cash sales according to the register file total $705 but the amount of cash in the register is $685.This cash shortage of $20 represents a Miscellaneous Expense.

A company made a bank deposit on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

Identify each of the following items as either (a) cash or (b) cash equivalent.

Which of the following are risks of e-commerce?

A ________ is a document signed by the depositor instructing the bank to pay a specified amount of money to a designated recipient.

Define an internal control system and describe the purpose that it serves.

On a bank reconciliation,an unrecorded debit memorandum for printing checks is:

The accountant for Stella Inc.prepared the bank reconciliation when the May 31 bank statement was received in the mail.The accountant discovered an error when preparing the reconciliation.A check issued to Remington Industries as payment on account in the amount of $340 was recorded in the company's books at $430.How would the company record the required adjusting entry for this item?