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

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

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

On August 3rd, Sonar Sales decides to establish a $275.00 Petty Cash Account to relieve the burden on Accounting. (a) Journalize this event. (b) On August 11th, the petty cash fund has receipts for mail and postage of $124.75, contributions and donations of $53.25, meals and entertainment of $63.85 and $32.75 in cash. Journalize the replenishment of the fund. (c) On August 12th, Sonar Sales decides to increase petty cash to $400.00. Journalize this event.

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)

A bank reconciliation should be prepared periodically because

An example of a preventive control is

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

Cash equivalents

Which of the following is not an internal control activity for cash?

The bank reconciles its statement to the company's records.

The amount of cash to be reported on the balance sheet at June 30 is the

A petty cash fund is used to pay relatively large amounts.

Entries are made to the Petty Cash account when

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

Derek Company gathered the following reconciling information in preparing its September bank reconciliation:

Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately on the balance sheet.

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.

The following information is from Madison Corporation's accounting records for May 20XX. Check # 3269 was returned as a double payment and voided. Checks that have not cleared the bank include 3252, 3260, and series 3275-3278. In addition to the above list of the checks, Madison had check #2264 for $32.98 and check #2655 for $45.99 outstanding previously that have not cleared. 1. Create an outstanding checks list for Madison at the end of May 20XX. 2. What is the total amount of checks that cleared the bank (written in May)?