Exam 6: Cash,fraud,and Internal Controls

The following information is available for Birch Company at December 31: Based on this information,Birch Company should report Cash and Cash Equivalents on December 31 of:

Human fraud is driven by the triple-threat of fraud: Opportunity,collusion,and rationalization.

Harsh penalties exist for violators of the Sarbanes-Oxley Act (SOX) – sentences up to 25 years in prison with severe fines.

Clearly establishing responsibilities and assigning all accounting activities to one person is an important principle of internal control.

Quibble Company established a $300 petty cash fund by issuing a check to the custodian on February 1.On February 15,the petty cash fund was replenished and increased to $800 in total.The contents of the petty cash fund at the time of the February 15 replenishment were: The company uses the perpetual inventory method.Prepare Quibble's general journal entry to record both the reimbursement and the increase of the petty fund on February 15.

A check involves 3 parties: a maker who signs the check,a payee who is the recipient,and a bank on which the check is drawn.

Two limitations of internal control systems are ________ and ________.

The principles of internal control include: