Exam 6: Cash and Internal Control

A check drawn by a company for $360 in payment of a liability was recorded in the journal as $630.This item would be included on the bank reconciliation as a(n)

Independent verification can be effective in preventing collusion.

Which internal control procedure is violated when the cashier at the checkout stand also records the daily receipts in the journal?

The Sarbanes-Oxley Act requires that the audit committee be composed of

Gentech Corp.prepared a bank reconciliation as of June 30,2017.The following items were identified: ? Gentech's bank balance \ 14,300 Deposits in transit 1,000 Outstanding checks 1,300 Bank service charge 50 Customer's NSF check returned by the bank 150 Gentech's adjusted cash balance at June 30,2017 is

While reconciling the checking account,an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company.Sonic recorded the receipt as $729,and the correct amount of the check was $279.Which of the following reconciling adjustments is required?

Which of the following is not a generally recognized internal control procedure?

An internal control system consists of all of the following policies and procedures except those necessary to ensure

Taylor Corp.identified the following data in preparing a bank reconciliation on October 31,2017. ?? Bank statement balance \ 29,600 Taylor's book balance (before adjustments) ? Outstanding checks 3,100 NSF check 300 Serwice charge 200 Deposits in transit 2,200 Interest earned on checking account 100 What is the net amount of the adjustments to Taylor's cash balance as a result of the bank reconciliation?

When a bank pays interest or collects an amount owed to a company by one of the bank's customers,the bank issues a debit memorandum.

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures. - Although the department supervisor can indicate a preferred supplier or vendor on purchase requisitions,the purchasing department has the responsibility for making the final decision on a vendor.

Coin and currency on hand and cash on deposit in the form of checking and savings accounts are the most obvious forms of cash.

A six-month bank certificate of deposit would be classified as a cash equivalent.

Which of the following statements best describes the term "outstanding check?"

Herbert and Evita are planning to open a quick copy center near the local college.They will make both cash and credit sales.They will hire college students to make copies and to operate the cash register.Either Herbert or Evita will act as manager during most hours that the business will be open.One student will be designated as assistant manager when they cannot be present. ? Required Describe procedures that Herbert and Evita might use to provide adequate internal control over cash and credit sales and bank deposits.

Which of the following procedures is not part of preparing a bank reconciliation of a checking account?

Sarcon Corp.prepares monthly bank reconciliations of its checking account balance.The bank statement for October,2017,indicated the following: Balance, October 31,2017 \ 7,920 Service charge for October 20 Interest earned during October 30 NSF check from Grey Corp. (deposited by Sarcon) 32 Note (\ 1,000) and inter est (\ 40) collected for Sarcon from a customer 1,040 An analysis of canceled checks and deposits and the records of Sarcon revealed the following items: Checking account bal ance per Sarcon books \ 7,170 Outstanding checks as of October 31 952 Deposit in transit at October 31 1,310 Error in recording check \#313 issued by Sarcon. 90 The correct amount of check #313 is $450,but it was recorded as a cash disbursement of $540.The check was issued to pay for merchandise purposes.The check appeared on the bank statement correctly. Required Prepare a bank reconciliation at October 31,2017 in proper form.

Petty cash typically is composed of coins and currency kept on hand in a business to make minor disbursements.

Why is cash management necessary?

Which of the following is another term for the invoice approval form?