Exam 7: Internal Control and Cash

In the normal operation of business,you receive a check from a customer and deposit it into your checking account.With your bank statement you are advised that this check for $775 is "NSF." The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75.During a bank reconciliation,you will

A minimum cash balance required by a bank is called

​Jackson Industries has collected the following information but needs assistance completing the table.The cash payments were 90% of collections. ​ ​ How much was the beginning balance of the cash account?

Which of the following items that appeared on the bank reconciliation did not require a journal entry?

The following procedures were recently implemented at the Pampered Pets,Inc.For each procedure,indicate whether the internal control over cash represents (1)a strength or (2)a weakness.If it is a weakness,please explain why. ​ (a)At the end of the day,cash register clerks are required to use their own funds to make up any cash shortages in their registers. ​ (b)At the end of the day,an accounting clerk compares the duplicate copy of the daily cash deposit slip with the deposit receipt obtained from the bank. ​ (c)After necessary approvals have been obtained for the payment of a voucher,the treasurer signs and mails the check.The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing. ​ (d)Along with the petty cash receipts for postage,office supplies,etc.,several postdated employee checks are in the petty cash fund.

If the balance in Cash Short and Over at the end of a period is a credit,it indicates that cash shortages have exceeded cash overages for the period.

Depositing all cash,checks,etc.in a bank and paying with checks is an internal control procedure over cash.

In preparing a bank reconciliation,the amount of a canceled check omitted from the journal is added to the balance per company's records.

What entry is required in the company's accounts to record outstanding checks?

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

A bank statement

After a bank reconciliation is completed,journal entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Cash equivalents include

​Stephanie Jo Company established a petty cash fund of $300 on May 1.At the end of the month,the petty cash fund has $42 in cash and receipts for postage,$39; entertainment,$146; and office supplies of $70. Prepare the needed journal entries,recording any discrepancy in the cash short and over account. ​

The amount of the outstanding checks is included on the bank reconciliation as a(n)

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430.What entry is required in the company's accounts?

Why would a bank require a company to maintain a compensating balance?

Describe the features of a voucher system and list typical supporting documents for a voucher.

Present entries to record the following transactions:

Which of the following should not be considered cash by an accountant?