Exam 5: Sarbanes-Oxley,internal Control,and Cash

The amount of deposits in transit is included on the bank statement as a(n)

On the bank's accounting records,customers' accounts are normally shown as

In preparing a bank reconciliation,the amount of outstanding checks is deducted from the balance per depositor's records.

The internal control environment is enhanced by the hiring and retention of competent,honest employees.

A check drawn by a depositor for $915 in payment of a liability was recorded as $195.What adjustment is required in the depositor's accounts?

A credit memorandum received with a bank statement means the bank account has been increased.

Which of the following elements of internal control focuses upon locating weaknesses and improving control effectiveness?

Explain why one person should NOT be permitted to purchase,receive,and pay for supplies.

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

Accompanying the bank statement was a debit memorandum for an NSF check received from a customer.This item would be included on the bank reconciliation as a(n)

The bank reconciliation is an important part of the system of internal controls.

The Sarbanes-Oxley Act of 2002 requires companies to maintain strong and effective internal controls over recording transactions and preparing financial statements.

A firm's internal control environment is influenced by

A voucher system is an example of an internal control procedure over cash receipts.

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

A bank reconciliation should be prepared periodically because

All organizations face risks,and the assessment of these risks is necessary so that the objectives of internal control can be achieved.

For each of the following procedures,indicate whether it is a strength or a weakness.Also,for each weakness,explain why it is a weakness and how it can be corrected.

A minimum cash balance maintained in a bank account is called a line of credit.

Using the following information,list the items that will require adjustments to the accounts of Salem Co.Also,indicate which accounts will increase or decrease due to the adjustment.