Exam 6: Cash,fraud,and Internal Controls

Great Falls Co.'s bank reconciliation as of February 28 is shown below. One of the adjusting journal entries that Great Falls must record as a result of the bank reconciliation includes:

On March 1,a company established a $75 petty cash fund.On March 12,the petty cash fund contains $3 in cash and the following paid petty cash receipts: transportation-in on merchandise inventory $14.25; postage,$19.50; and office supplies,$36.Give the general journal entry to reimburse the fund and to increase its amount to $150 on March 12.

Internal control procedures for cash receipts do not require that:

The following information is taken from Reagan Company's December 31 balance sheet: If net sales for the current year were $612,000,the firm's days' sales uncollected for the year is: $\bold{\text{(Use 365 days a year.)}}$

The ________ account is used to record the effects of cash overages and shortages from errors in making change or managing a petty cash fund.

If 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:

Proper internal control would require that a department manager inform the purchasing department of its needs for additional merchandise by preparing and signing a purchase requisition which lists the merchandise requested to be purchased.

Internal control policies and procedures have limitations not including:

Internal controls are crucial to global companies because of all of the following risks except:

An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:

Zhang Co.uses a voucher system for documentation and verification.Complete the following grid regarding their system.

The treasurer of a company is responsible for cash management.List five cash management principles that are essential for effective cash management.

Basic bank services do not include:

Petty cash reimbursement requires a journal entry that involves a debit to the appropriate expenses and a credit to Cash.

________ are checks written by the depositor,deducted on the depositor's records,and sent to the payee,but not yet recorded by the bank at the bank statement date.

A seller (or supplier)of goods or services to a business organization is known as a:

Pelcher Co.maintains a $400 petty cash fund.On January 31,the fund is replenished.The accumulated receipts on that date represent $110 for office supplies,$140 for merchandise inventory,and $70 for miscellaneous expenses.There is a cash overage of $4. -Based on this information,the amount of cash in the fund before the replenishment is:

Basic bank services such as bank accounts,bank deposits,and checking contribute to the control of cash.

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

Canceled checks are checks the bank has paid and deducted from the customer's account during the period.