Exam 8: Internal Control and Cash

A check of $300,000,deposited by a company,was returned to the bank for nonsufficient funds.How would this information be included on the bank reconciliation?

Vaughn Services hires a new accountant to maintain its petty cash fund.Although the employee possesses an accounting degree,he/she had been previously convicted of embezzlement. Which internal control procedure needs to be addressed in the above situation?

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer. The mailroom employee opens all incoming mail.Customers' checks are sent to the treasurer,and remittance advices are sent to the accounting department.The controller compares the daily bank deposit amount from the treasurer and the daily debit to cash from the accounting department.

Internal control is an organizational plan that ensures that the financial statements are prepared and submitted on time.

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

A system cannot be overcome or broken into if its internal controls are properly designed and structured.

Which of the following is an attribute of the internal control procedure-assignment of responsibilities?

In a bank reconciliation,a deposit in transit will be shown on the bank side of the reconciliation.

A pharmaceutical company testing drugs to determine possible side effects is a part of ________.

There are three parties to a check: the depositor,the maker,and the bank.

The bank charged a service fee of $55.How would this information be included on the bank reconciliation?

Refer to the following bank reconciliation: Journalize the adjusting entry for the third reconciling item: NSF check.

Journal entries are required if the bank reconciliation includes a book error.

Which of the following statements about internal control is true?

The difference that arises between the balance on the bank statement and the balance on the company's books because of a time lag in recording transactions is known as a permanent difference.

Prepare the journal entries for the following petty cash transactions of Morrison Dental Supplies.

Two or more people working together to circumvent internal controls and defraud a company is known as ________.

Which of the following is the basic internal control measure for cash?

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

Refer to the following bank reconciliation: Journalize the adjusting entry for the second reconciling item: Interest revenue.