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

The actual cash received during the week ended June 7 for cash sales was $18,632.00, and the amount indicated by the cash register total was $18,628.00. Journalize the entry to record the cash receipts and cash sales. Journal

You began your new job as the accountant for Morton Company. You were surprised to find that the company had a $2,000 petty cash fund, which sits in the break room. The President of the company told you: "Our petty cash system here works quite smoothly. Since everyone is honest here, everyone has access to the fund for incidentals that might pop up in the course of the business day. Most of these situations don't have any receipts tied to them, so I just put the money back in the fund when my secretary tells me that we have run out and debit the amount to Miscellaneous Expense." Required: (a) Should you implement some controls on petty cash? Why? (b) If so, what controls could be used for petty cash?

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

The cash account in the company's ledger is a(n)

Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is

A customer's check received in settlement of an account receivable is considered cash.

In preparing a bank reconciliation, the amount indicated by a debit memo for bank service charges is added to the balance per company's records.

When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished.

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: Required: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

List and define each of the five elements of internal control.

The Sarbanes-Oxley Act of 2002 was passed by Congress due to the public outcry after the financial scandals of the early 2000s.

In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is "NSF". The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will:

Using the following information, prepare a bank reconciliation for Cole Co. for May 31, 2011:

When a clerk enters a sale and the customer can see the amount displayed and is given a cash receipt, this is an example of a preventive control.

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. Record the appropriate journal entries that would be necessary for Gatlin Co.

A voucher is a form on which is recorded pertinent data about a liability and the particulars of its payment.

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

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

List the principal advantage of Electronic Funds Transfers.

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