The following information is taken from Reagan Company's December 31 balance sheet: \[\begin{array} { | l | r | } \hline \text { Cash and cash equivalents } & \$ 8,419 \\ \hline \text { Accounts receivable } & 70,422 \\ \hline \text { Merchandise inventories } & 60,362 \\ \hline \text { Prepaid expens es } & 4,100 \\ \hline \text { Accounts payable } & \$ 14,950 \\ \hline \text { Notes payable } & 8 6 , 6 3 8 \\ \hline \text { Other current liabilities } & 9,500 \\ \hline \end{array}\] If net credit sales for the current year were $612,000, the firm's days' sales uncollected for the year is: (Use 365 days a year.)

A) 60 days B) 85 days C) 154 days D) 42 days E) 70 days A) 60 days B) 85 days C) 154 days D) 42 days E) 70 days

Easton Co. deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on June 30, its Cash account shows a debit balance of $60,209. Easton's June bank statement shows $58,349 on deposit in the bank. Determine the adjusted cash balance using the following information: \[\begin{array} { | l | r | } \hline \text { Deposit in transit } & \$ 3,800 \\ \hline \text { Outstanding checks } & \$ 1,925 \\ \hline \text { Check printing fee, not yet recorded by company } & \$ 15 \\ \hline \text { Interest earned on account, not yet recorded by the company } & \$ 30 \\ \hline \end{array}\] The adjusted cash balance should be:

A) $62,149 B) $60,194 C) $60,224 D) $56,424 E) $60,239 A) $62,149 B) $60,194 C) $60,224 D) $56,424 E) $60,239

Exam 8: Cash and Internal Controls

The internal document that is used to notify the appropriate person that ordered goods have been ^received^and^to^describe^the^quantities^and^condition^of^the^goods^is^the.

(Short Answer)

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Question 141

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.

(Essay)

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Question 142

Spencer Co. has a $200 petty cash fund. At the end of the first month the accumulated receipts represent $43 for delivery expenses, $127 for merchandise inventory, and $12 for miscellaneous expenses. The fund has a balance of $18. The journal entry to record the reimbursement of the account includes a:

(Multiple Choice)

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Question 143

Preparing a bank reconciliation on a monthly basis is an example of:

(Multiple Choice)

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Question 144

The entry to record reimbursement of the petty cash fund for postage expense should include:

(Multiple Choice)

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Question 145

A company reported net sales for 2014 of $265,000 and $545,000 for 2015. The year-end balances of accounts receivable were $39,000 for 2014 and $92,000 for 2015. 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.

(Essay)

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Question 146

The use of internal controls provides a guarantee against losses due to operating activities.

(True/False)

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Question 147

Spencer Co. decides to establish a petty cash fund with a beginning balance of $200. The company decides that any purchase under $25 can be processed through petty cash instead of the voucher system. The journal entry to record establishing the account is:

(Multiple Choice)

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Question 148

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

(True/False)

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Question 149

Managers place a high priority on internal control systems because the systems assist managers in all of the following except:

(Multiple Choice)

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Question 150

A debit memorandum on a bank statement indicates:

(Multiple Choice)

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Question 151

Internal control procedures for cash receipts do not require that:

(Multiple Choice)

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Question 152

The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash equivalents \ 8,419 Accounts receivable 70,422 Merchandise inventories 60,362 Prepaid expens es 4,100 Accounts payable \ 14,950 Notes payable 86,638 Other current liabilities 9,500 If net credit sales for the current year were $612,000, the firm's days' sales uncollected for the year is: (Use 365 days a year.)

(Multiple Choice)

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Question 153

A debit balance in the Cash Over and Short account reflects an expense and is reported on the income statement as part of selling, general and administrative expenses.

(True/False)

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Question 154

Easton Co. deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on June 30, its Cash account shows a debit balance of $60,209. Easton's June bank statement shows $58,349 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit \ 3,800 Outstanding checks \ 1,925 Check printing fee, not yet recorded by company \ 15 Interest earned on account, not yet recorded by the company \ 30 The adjusted cash balance should be:

(Multiple Choice)

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Question 155

The voucher system of control:

(Multiple Choice)

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Question 156

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, how should this error be treated on the bank reconciliation?

(Multiple Choice)

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Question 157

________ 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.

(Short Answer)

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Question 158

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

(True/False)

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Question 159

Describe the net method of accounting for purchases. Why might companies use the net method?

(Essay)

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Question 160

Showing 141 - 160 of 220

Exam 8: Cash and Internal Controls

The internal document that is used to notify the appropriate person that ordered goods have been received and to describe the quantities and condition of the goods is the .

Preparing a bank reconciliation on a monthly basis is an example of:

The entry to record reimbursement of the petty cash fund for postage expense should include:

The use of internal controls provides a guarantee against losses due to operating activities.

Spencer Co. decides to establish a petty cash fund with a beginning balance of $200. The company decides that any purchase under $25 can be processed through petty cash instead of the voucher system. The journal entry to record establishing the account is:

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

Managers place a high priority on internal control systems because the systems assist managers in all of the following except:

A debit memorandum on a bank statement indicates:

Internal control procedures for cash receipts do not require that:

A debit balance in the Cash Over and Short account reflects an expense and is reported on the income statement as part of selling, general and administrative expenses.

The voucher system of control:

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, how should this error be treated on the bank reconciliation?

________ 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.

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Describe the net method of accounting for purchases. Why might companies use the net method?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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The internal document that is used to notify the appropriate person that ordered goods have been ^received^and^to^describe^the^quantities^and^condition^of^the^goods^is^the.