Question 1

Document used to place an order with a vendor is a ________.

Accepted Answer

The answer of Document used to place an order with...

Question 2

Describe a bank reconciliation and discuss its purpose.

Accepted Answer

A bank reconciliation is a report explai

Question 3

Assume that the custodian of a $450 petty cash fund has $65 in coins and currency plus $382 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

Accepted Answer

A) A debit to Cash for $382. 
B) A credit to Cash Over and Short for $3. 
C) A debit to Petty Cash for $385. 
D) A credit to Cash for $385. 
E) A debit to Cash for $450. 
A) A debit to Cash for $382. 
B) A credit to Cash Over and Short for $3. 
C) A debit to Petty Cash for $385. 
D) A credit to Cash for $385. 
E) A debit to Cash for $450.

Question 4

Liquidity refers to a company's ability to pay its long-term obligations.

Accepted Answer

A) True 
 B)False

Question 5

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

Accepted Answer

Internal control principles as applied t

Question 6

The following information is available for the Savvy Company for the month of June.
a.On June 30,after all transactions have been recorded,the balance in the company's Cash account has a balance of $17,202.
b.The company's bank statement shows a balance on June 30 of $19,279.
c.Outstanding checks at June 30 total $2,984.
d.The bank collected $770 on a note receivable that is not yet recorded by Savvy Company.
e.A $67 NSF check from a customer,J.Maroon is shown on the bank statement but not yet recorded by the company.
f.A deposit placed in the bank's night depository on June 30 totaling $1,675 did not appear on the bank statement.
g.Comparing the checks on the bank statement with the entries in the accounting records reveals that check #3445 for the payment of an account payable was correctly written for $2,450,but was recorded in the accounting records as $2,540.
h.Included with the bank statement was a bank service charge in the amount of $25 .It has not been recorded on the company's books.
1.Prepare the June bank reconciliation for the Savvy Company.
2.Prepare the general journal entries to bring the company's book balance of cash into conformity with the reconciled balance as of June 30.

Accepted Answer

The answer of The following information is available for the...

Question 7

A ________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Accepted Answer

The answer of A ________ is a report explaining any...

Question 8

Cash equivalents

Accepted Answer

A) Fundamental guidelines applicable to all companies established to minimize the risk of fraud and theft and to increase the reliability and accuracy of the accounting records. 
B) Short-term, highly liquid investment assets that are readily convertible to cash and close enough to their due date so that their market value will not greatly change. 
C) An internal document used to collect information to control cash payments and to ensure that a transaction is properly recorded. 
D) An income statement account used to record the income effects of cash overages and cash shortages arising from missing petty cash receipts or errors in making change. 
E) A measure of how quickly a company can convert its accounts receivable into cash.
F)Principle that says the costs of internal controls must not exceed their benefits
G)A set of procedures and approvals designed to control cash payments and the acceptance of liabilities.
H)Used by the bank to verify signatures of persons authorized to write checks.
I)A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.
J)The ability of a company to pay for its near-term obligations. 
A) Fundamental guidelines applicable to all companies established to minimize the risk of fraud and theft and to increase the reliability and accuracy of the accounting records. 
B) Short-term, highly liquid investment assets that are readily convertible to cash and close enough to their due date so that their market value will not greatly change. 
C) An internal document used to collect information to control cash payments and to ensure that a transaction is properly recorded. 
D) An income statement account used to record the income effects of cash overages and cash shortages arising from missing petty cash receipts or errors in making change. 
E) A measure of how quickly a company can convert its accounts receivable into cash.
F)Principle that says the costs of internal controls must not exceed their benefits
G)A set of procedures and approvals designed to control cash payments and the acceptance of liabilities.
H)Used by the bank to verify signatures of persons authorized to write checks.
I)A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.
J)The ability of a company to pay for its near-term obligations.

Question 9

Which internal control principle prescribes the use of pre-numbered printed checks?

Accepted Answer

A) Technological controls. 
B) Maintain adequate records. 
C) Perform regular and independent reviews. 
D) Establish responsibilities. 
E) Divide responsibility for related transactions. 
A) Technological controls. 
B) Maintain adequate records. 
C) Perform regular and independent reviews. 
D) Establish responsibilities. 
E) Divide responsibility for related transactions.

Question 10

________ reflects the liquidity of a company's accounts receivable.

Accepted Answer

Days' sales uncollec

Question 11

After preparing a bank reconciliation,adjustments must be made for items reconciling the book balance.

Accepted Answer

A) True 
 B)False

Question 12

A voucher system is a set of procedures and approvals designed to control cash payments and the acceptance of liabilities.

Accepted Answer

A) True 
 B)False

Question 13

Maintaining adequate records is an important internal control principle.

Accepted Answer

A) True 
 B)False

Question 14

The payee is the person who signs a check,authorizing its payment.

Accepted Answer

A) True 
 B)False

Question 15

What is the purpose of the days' sales uncollected ratio?

Accepted Answer

The days' sales uncollected ratio is a l

Question 16

For each of the independent cases below,identify the principle of internal control that is violated,and recommend what should be done to remedy the violation.
1.In order to save money,Indigo Company has decided to drop its property insurance on assets; and stop bonding the cashiers who handle upwards of $5,000 in cash each day.
2.Jobs Company records each sale on a preprinted invoice.Because invoices are sometimes damaged in the process of preparation,the invoices are not prenumbered.Instead,the sales clerk writes the next number on each invoice as it is prepared.
3.Keegan Company is a very small business.Dylan Epps,one of the two office clerks,opens the mail each day and removes the cash receipts that come in the mail.Dylan also records the receipts in the cash records and the customer's account and deposits the cash in the bank.
4.Ludwig Company prides itself on hiring only the most competent employees.The owner,Jeremy Ludwig,believes that since the employees are highly competent he can show he trusts them completely by not checking up on their performance.
5.Maple Industries is a small business with three accounting employees.Each employee is well-trained and able to perform any of the accounting tasks,including handling cash receipts and cash payments,and preparing the bank reconciliation.Because of this cross-training,the employees share responsibilities for all of the tasks.

Accepted Answer

1.Insure assets and bond key employees.E

Question 17

The Sarbanes-Oxley Act (SOX)requires managers and auditors of companies whose stock is traded on an exchange to document and verify the system of internal controls.

Accepted Answer

A) True 
 B)False

Question 18

The use of electronic communication to transfer cash from one party to another is called ________.

Accepted Answer

electronic

Question 19

________ includes currency,coins,and amounts on deposit in checking accounts and savings accounts.

Accepted Answer

The answer of ________ includes currency,coins,and amounts on deposit in...

Question 20

According to good internal control policies,a person who controls an asset also maintains that asset's accounting records.

Accepted Answer

A) True 
 B)False

Exam 6: Cash,fraud,and Internal Controls

Document used to place an order with a vendor is a ________.

Describe a bank reconciliation and discuss its purpose.

Assume that the custodian of a $450 petty cash fund has $65 in coins and currency plus $382 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

Liquidity refers to a company's ability to pay its long-term obligations.

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

A ________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Cash equivalents

Which internal control principle prescribes the use of pre-numbered printed checks?

________ reflects the liquidity of a company's accounts receivable.

After preparing a bank reconciliation,adjustments must be made for items reconciling the book balance.

A voucher system is a set of procedures and approvals designed to control cash payments and the acceptance of liabilities.

Maintaining adequate records is an important internal control principle.

The payee is the person who signs a check,authorizing its payment.

What is the purpose of the days' sales uncollected ratio?

The Sarbanes-Oxley Act (SOX)requires managers and auditors of companies whose stock is traded on an exchange to document and verify the system of internal controls.

The use of electronic communication to transfer cash from one party to another is called ________.

________ includes currency,coins,and amounts on deposit in checking accounts and savings accounts.

According to good internal control policies,a person who controls an asset also maintains that asset's accounting records.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters