Exam 6: Cash and Internal Control

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 How much is Taylor's adjusted cash balance on October 31,2017?

A debit memorandum appeared on Cinco Inc.'s May bank statement.How will Cinco treat this amount on its May bank reconciliation?

Which of the following represents a group composed of key officers of a corporation and outside members responsible for the general oversight of the affairs of the company?

Lakeland Enterprises invested its excess cash in the following instruments during December 2017: Certi ficate of deposit, due January 31,2020 \ 85,000 Certi ficate of deposit, due March 30, 2018 120,000 Commerci al paper, original maturity date February 28, 2018 105,000 Deposit into a money market fund 45,000 Investment in stock 55,000 90 -day Treasury bills 110,000 Treasury note, due December 1, 2045 400,000 Required Determine the amount of cash equivalents that should be combined with cash on the company's balance sheet at December 31,2017,and for purposes of preparing a statement of cash flows for the year ended December 31,2017.

__________ are the crucial link between economic transactions entered into by an entity and the accounting records of those events.

Jack's Jungle Fun,Inc.is a manufacturer of children's outdoor play equipment.The factory foreman determines when orders for materials are necessary.The orders are sent to the purchasing department that places orders with the vendors recommended by the factory foreman.When the materials are received,they are delivered directly to a central storeroom without counting what has been received.When invoices are received for the materials purchased,they are sent to the accounting department for payment.The accounting department compares the invoices with purchase orders.If the two documents are in agreement,the invoice is approved for payment.The accounting department prepares the checks that are signed by the company treasurer. ? Required Recommend improvements in the company's procedures for purchasing and paying for purchases of materials that will provide better internal control over purchases and payment for those purchases.

McDonald's Corporation is the largest food service organization in the world.The proper handling of cash and food is important to the profitability of McDonald's.Based on your personal knowledge of McDonald's and the internal control concepts and procedures described in the textbook,answer the following questions. - Describe procedures that you believe McDonald's may use to control the purchase and payment of food products.

A voucher is usually supported by

Which of the following statements regarding a credit memorandum is not true?

What five-member body created by the Sarbanes-Oxley Act was given authority to set U.S.auditing standards?

Having only one person authorized to both prepare and sign checks is a violation of what internal control procedure?

A bank informs a customer that a service charge has been assessed on its account by including a credit memorandum on the monthly bank statement.

An amount has been recorded as an increase to the company's Cash account,but has not yet been reflected on the bank statement is called a(n)__________.

A(n)__________ is a form the accounting department uses before making payment to document the accuracy of all information about a purchase.

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. - The clerk in the accounting department records both purchases and payments of invoices.

Annual reports must include an internal control report.In this report,which group has the primary responsibility for establishing and maintaining an adequate control structure and procedures for financial reporting?

Marathon Street Bank sent Flank Industries their end-of-month bank statement for October. The end-of-month balance by the bank is $11,229. From the statement, it can be determined that a deposit for $4,250 is in transit at the end of the statement period. Also, the statement reveals that checks for $86, $106, and $95 are outstanding. Marathon Street collected a 90-day, 12% interest, $4,000 note receivable charging $20 for the service. Accrued interest of $120 on the note has also been collected. The bank charges a monthly account fee of $35. The end-of-month balance per the company books is $11,127. Required 1. Complete a bank reconciliation for Flank Industries at October 31, 2017. 2. Identify any necessary adjustments to the accounting records identified in the reconciliation.

For a buyer,a purchase order is not the basis for recording a purchase and an account payable.

The key to the classification of an amount as cash is that it be readily available to pay debts.

When preparing a bank reconciliation,deposits in transit should be