Exam 8: Sarbanes-Oxley, Internal Control, and Cash

For strong internal control system over cash, it is important to have the duties related to cash receipts and cash payments divided among different employees.

Peaches, Inc. reported the following data in it's December 31, 2011 annual report: Cash and cash equivalents $460,000 Cash flow from operations (240,000) 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 compensating balance occurs when a bank may require a company to maintain a maximum cash balance.

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

Which of the following would be deducted from the balance per books on a bank reconciliation?

The doomsday ratio includes both cash and cash equivalents in the numerator.

Journal entries based on the bank reconciliation are required in the company's accounts for

Internal control does not consist of policies and procedures that

The control environment in an internal control structure is the attitude and awareness of internal control by all employees.

Journalize the entries to record the following: Journal

A person authorized to write checks drawn on a checking account at a bank must sign and have on file with the bank a

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

The following data is from the Miser Company for years ended 2008-2011. Calculate the following:

A voucher is a written authorization to make a cash payment.

Which of the following would be subtracted from the balance per books on a bank reconciliation?

Green Valley Bank sent Comstock Industries their end of month bank statement for July. The end of month balance by the bank is $11,237.00. The statement shows that a deposit for $4,250.00 is in transit at the end of the statement period. The statement also revealed that checks for $87.00, $105.00, and $95.00 are outstanding. Green Valley collected a 90 day, 12% interest $4,000.00 note receivable charging $20.00 for the service. No interest has been accrued on the note. The bank charges a monthly account fee of $35.00. The end of month balance per company books is $11,135.00. Complete a bank/account reconciliation and write any necessary journal entries for the reconciliation.

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.

Which of the following would be subtracted from the balance per bank on a bank reconciliation?

Which of the following would be added to the balance per books on a bank reconciliation?

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?