Exam 6: Cash and Internal Control

Audit committees are required to consist of only directors who are key officers of the company.

Which of the following is an example of a credit memorandum?

Dinho Corporation identified the following data when preparing its April bank reconciliation: Bank statement balance \ 45,000 Dinho's book balance (before adjustments) ? Outstanding checks 4,500 NSF checks 1,400 Service charge 300 Deposits in transit 5,000 Interest earned on checking account 25 - In addition,Dinho incorrectly recorded a deposit in its books in the amount of $1,000.The correct amount was recorded by the bank as $1,200. What is the net amount of the adjustments to Dinho's book balance as a result of the bank reconciliation?

Which of the following is an example of a debit memorandum?

Typically the classification known as "readily available" refers to investments that are converted into cash in __________ months or less.

Which of the following is not considered a business (source)document?

An effective system of internal control is critical to protecting a company's investment in three of its major assets: cash,accounts receivable,and inventory.For each asset,describe how a company might protect that asset.

Which of the following could never be considered to be cash equivalents?

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. - Cash register tapes are picked up on a regular basis each day by an employee from the accounting department.

When preparing a bank reconciliation,bank service charges are

When preparing a bank reconciliation,NSF checks are

A company policy that requires all prospective employees to be interviewed by the personnel department is an example of an accounting control.

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 adjusted cash balance on October 31,2017?

A company's internal control system is designed by its external auditors.

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. - An employee in the accounting department records cash receipts from customers and prepares a bank deposit slip.

Which of the following statements regarding limitations on internal control is true?

What are some of the limitations on a company's effective system of internal control?

Which of the following items would not be a reconciling item?

Checks received from customers are considered to be cash in the company's books.

When preparing a bank reconciliation interest earned on a checking account is