Question 1

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Accepted Answer

A)  accounting controls 
B)  cash controls 
C)  preventive controls 
D)  detective controls 
A)  accounting controls 
B)  cash controls 
C)  preventive controls 
D)  detective controls C

Question 2

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Accepted Answer

A)  internal auditors 
B)  independent accountants 
C)  Board of Director's audit committee 
D)  Board of Trustees 
A)  internal auditors 
B)  independent accountants 
C)  Board of Director's audit committee 
D)  Board of Trustees D

Question 3

Credit memos from the bank

Accepted Answer

A)  decrease a bank customer's account 
B)  are used to show a bank service charge 
C)  show that a company has deposited a customer's NSF check 
D)  show the bank has collected a note receivable for the customer 
A)  decrease a bank customer's account 
B)  are used to show a bank service charge 
C)  show that a company has deposited a customer's NSF check 
D)  show the bank has collected a note receivable for the customer D

Question 4

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

Accepted Answer

A)  deposited checks returned for insufficient funds 
B)  a promissory note left for collection 
C)  a service charge 
D)  notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket 
A)  deposited checks returned for insufficient funds 
B)  a promissory note left for collection 
C)  a service charge 
D)  notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket

Question 5

A bank statement

Accepted Answer

A)  is a credit reference letter written by the company's bank. 
B)  lets a company know the financial position of the bank as of a certain date. 
C)  is a bill from the bank for services rendered. 
D)  shows the activity that increased or decreased the company's account balance. 
A)  is a credit reference letter written by the company's bank. 
B)  lets a company know the financial position of the bank as of a certain date. 
C)  is a bill from the bank for services rendered. 
D)  shows the activity that increased or decreased the company's account balance.

Question 6

Journalize the entries to record the following:
Sept 1 Established a petty cash fund of $350
Sept 30 The amount of cash in the petty cash fund is now $130. The fund is replenished based on the following receipts: office supplies, $116; postage $100.
Record any discrepancy in the cash short and over account.
Journal

Accepted Answer

The answer of Journalize the entries to record the following:
Sept...

Question 7

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

During 2010, Tempo Inc has monthly cash expenses of $115,000. On December 31, 2010, their cash balance is $1,437,500. The ratio of cash to monthly cash expenses is

Accepted Answer

A)  8.0 
B)  12.5 
C)  87.5 
D)  11.5 
A)  8.0 
B)  12.5 
C)  87.5 
D)  11.5

Question 10

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts?

Accepted Answer

A)  debit Accounts Payable; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Accounts Payable 
D)  debit Accounts Receivable; credit Cash 
A)  debit Accounts Payable; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Accounts Payable 
D)  debit Accounts Receivable; credit Cash

Question 11

The cash account for Santiago Co. on May 31, 2014 indicated a balance of $20,915. The March bank statement indicated an ending balance of $25,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
   Prepare a bank reconciliation as of May 31, 2014. Journalize the necessary entries.
Santiago Co.
Bank Reconciliation
May 31, 2014
   Journal

Accepted Answer

Santiago Co.
Bank Re

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

List the objectives of internal control and give an example of how each is implemented.

Accepted Answer

Internal control provides reas

Question 14

For each of the following, explain whether the issue would require you to prepare a journal entry for your company, assuming any original entry is correct. If an entry is required, please include it as part of your answer.
(1) The bank recorded your deposit as $91 rather than the actual amount of $191.
(2) Two outstanding checks amounted to $450.
(3) Company check number 538 for postage was recorded incorrectly by the company bookkeeper as $50 instead of $59.
(4) The bank paid a check for $500 after the company had issued a stop payment and voided the check.
(5) An EFT deposit was made by one of the company's customers, Atlas Design, for merchandise received. The sale had previously been recorded when shipped and was equal to the payment amount of $125.

Accepted Answer

(1) If you recorded the deposit correctl

Question 15

Thompson Company developed the following reconciling information in preparing its October bank reconciliation:   Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

Accepted Answer

A)  $11,050 
B)  $19,450 
C)  $15,950 
D)  $11,150 
A)  $11,050 
B)  $19,450 
C)  $15,950 
D)  $11,150

Question 16

Peaches, Inc. reported the following data in it's December 31, 2011 annual report:
   Required:
(1) What is the company's "cash burn" per month?
(2) What is the company's ratio of cash to monthly cash expenses?

Accepted Answer

(1) $240,000/12=$20,

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

EFT

Accepted Answer

A)  means Efficient Funds Transfer 
B)  can process certain cash transactions at less cost than by using the mail 
C)  makes it easier to document purchase and sale transactions 
D)  means Effective Funds Transfer 
A)  means Efficient Funds Transfer 
B)  can process certain cash transactions at less cost than by using the mail 
C)  makes it easier to document purchase and sale transactions 
D)  means Effective Funds Transfer

Question 19

The bank statement for Gatlin Co. indicates a balance of $7,735.00 on June 30, 2010. After the journals for June had been posted, the cash account had a balance of $4,098.00. Prepare a bank reconciliation on the basis of the following reconciling items:

Accepted Answer

The answer of The bank statement for Gatlin Co. indicates...

Question 20

In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

Accepted Answer

A) True 
 B)False

Exam 7: Sarbanes-Oxley, Internal Control, and Cash

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Credit memos from the bank

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

A bank statement

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

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

During 2010, Tempo Inc has monthly cash expenses of $115,000. On December 31, 2010, their cash balance is $1,437,500. The ratio of cash to monthly cash expenses is

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts?

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

List the objectives of internal control and give an example of how each is implemented.

Thompson Company developed the following reconciling information in preparing its October bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

Peaches, Inc. reported the following data in it's December 31, 2011 annual report: Required: (1) What is the company's "cash burn" per month? (2) What is the company's ratio of cash to monthly cash expenses?

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

EFT

The bank statement for Gatlin Co. indicates a balance of $7,735.00 on June 30, 2010. After the journals for June had been posted, the cash account had a balance of $4,098.00. Prepare a bank reconciliation on the basis of the following reconciling items:

In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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