Exam 6: Cash and Internal Control

The only reason a company needs to create an internal control system is to deter intentional fraudulent acts.

An accounting system must be fully computerized in order to ensure the company has proper internal control.

Which of the following would not appear on a bank statement for a checking account?

Border Company's Cash account had a balance of $962 on August 31.This included a bank deposit of $87 that was in transit.The August 31 bank statement contained the following information: Border also had checks outstanding of $169.What is Border's adjusted cash balance at August 31? Bank statement balance \ 1,089 NSF check 16 Bank service charge 7 Coll ection of notes receivable 68

If receipts from cash sales of $7,500 were recorded incorrectly as $5,700 in the company's books,then this item would be included on the bank reconciliation as a(n)

If a credit memorandum appears on a bank reconciliation,this could be an indication that there has been a

A(n)__________ is a form used by the receiving department to account for the quantity and condition of merchandise received from a supplier.

A bank does not have the legal right to demand that a customer notify it before making a withdrawal from a savings account.

The accountant for Fazzi Corp.was preparing a bank reconciliation as of April 30,2017.The following items were identified: ? Fazzi's book balance \ 46,200 Outstanding checks 1,100 Interest earned on checking account 50 Customer's NSF check returned by the bank 500 In addition,Fazzi incorrectly recorded a customer's check in cash receipts as $150;the bank recorded the amount correctly as $510.What amount will Fazzi report as its adjusted cash balance at April 30,2017?

Treasury notes with a maturity of six months or less that are issued by the federal government are cash equivalents.

The __________ is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

The accountant for Busch Corp.was preparing a bank reconciliation as of February 28,2017.The following items were identified: ? Busch's book balance \ 15,000 Outstanding checks 2,500 Service charge 15 Customer's NSF check returned by the bank 100 What amount will Busch report as its adjusted cash balance at February 28,2017?

What rational is used in order to determine if an amount is "cash"?

The __________ is the body created by the Sarbanes-Oxley Act that was given the authority to set auditing standards in the United States.

Your friend,Mike,has just started a business and comes to you with a question."I'm confused.I have a memo included with my bank statement indicating a $55 service charge for printing new checks.Since you're an accounting major,maybe you can explain to me why they call it a 'debit memorandum,' even though they are deducting this amount from my account.When I took Accounting in school,I could have sworn that a decrease in the Cash account would be a credit and not a debit." ​ Required In a short paragraph,explain this issue to your friend.

The treasurer for Rahm Corp.was preparing a bank reconciliation as of September 30,2017.The following items were identified: ? Rahm's book bal ance \ 32,800 Deposits in transit 4,300 Outstanding checks 2,200 Interest earned on checking account 100 Customer's NSF check returned by the bank 400 Rahm Corp.'s adjusted cash balance at September 30,2017 is

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. -Monthly statements,indicating the current balance due,are mailed to customers.

The following data was identified by Raines Corp.in preparation of its bank reconciliation on October 31,2017: Bank statement balance \ 30,700 Raines' book bal ance (before adjustments) ? Outstanding checks 4,200 NSF checks 400 Service charge 300 Deposits in transit 3,100 Interest earned on checking account 100 - What is the net amount of the increase or decrease in Raines' cash balance which must be recorded as a result of the adjustments identified by the bank reconciliation?

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. - Checks are issued by designated officers in the finance department.

__________ controls primarily concern safeguarding assets and ensuring the reliability of the financial statements.