Exam 6: Cash, fraud, and Internal Controls

Assume that the custodian of a $450 petty cash fund has $62 in coins and currency plus $383 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

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. -The journal entry to replenish the fund on January 31 is:

A key factor in a voucher system includes all of the following except:

List the principles of internal control.

Which of the following is not one of the policies and procedures that make up an internal control system?

What is a voucher system and what are the two areas for which it establishes control procedures?

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: Purrency and coins \ 12 Petty cash receipts for: Transportation- in for inventory \ 39 Delivery expense 88 Repairs to office equipment 47 Postage 64 Entertainment of customers 53 291 Total \ 303 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.

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and have maturities of one year.

The impact of technology on internal controls includes:

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 needed and requests that it be purchased.

At the end of the current period,a company reported $725,000 in net credit sales and $100,000 in ending accounts receivable.Calculate this company's days' sales uncollected at the end of the current period.

A remittance advice is a(n):

On a bank reconciliation,the amount of an unrecorded bank service charge should be:

Principles of internal control include all of the following except:

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.A credit memo included with the bank statement indicates that the bank collected $770 on a noninterest-bearing note receivable for Savvy. e.A debit memo included with the bank statement shows a $67 NSF check from a customer,J.Maroon. 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 debit memorandum in the amount of $25 for bank service charges.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.

Assigning purchasing,receiving,and paying for merchandise to one department or individual is a way to streamline a voucher system.

Identify whether each of the following items 1 through 10 would on appear on the bank side or the book side of a bank reconciliation. _____ 1.Bank service charges _____ 2.Outstanding checks _____ 3.Deposits in transit _____ 4.NSF check _____ 5.Interest on a checking account _____ 6.The company properly wrote a check for $95.80 that the bank incorrectly paid as $9.58. _____ 7.The bank printed checks for the depositor for a fee. _____ 8.Bank debit memorandum _____ 9.Bank credit memorandum _____ 10.The bank collected a $1,000 note for the depositor.

The following account balances are taken from Ferguson Sports at December 31. Accounts receivable 18,02 23,450 Net sales 163,50 157,100 Calculate the number of days' sales uncollected for both years.According to this analysis,is the company's collection of receivables improving? Explain.