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

During a bank reconciliation process,

The notification accompanying a check that indicates the specific invoice being paid is called a

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

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Entries are made to the Petty Cash account when

(a) Where are cash equivalents disclosed in the financial statements (b) List fhree examples of cash equivalents.

Why would a bank require a company to maintain a compensating balance?

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

In establishing a petty cash fund,a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

A minimum cash balance required by a bank is called

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance.Complete the following table to help your new staff understand.

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

The following procedures were recently implemented at the Pampered Pets,Inc.For each procedure,indicate whether the internal control over cash represents (1)a strength or (2)a weakness.If it is a weakness,please explain why. (a)At the end of the day,cash register clerks are required to use their own funds to make up any cash shortages in their registers. (b)At the end of the day,an accounting clerk compares the duplicate copy of the daily cash deposit slip with the deposit receipt obtained from the bank. (c)After necessary approvals have been obtained for the payment of a voucher,the treasurer signs and mails the check.The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing. (d)Along with the petty cash expense receipts for postage,office supplies,etc. ,several post-dated employee checks are in the petty cash fund.

Accompanying the bank statement was a debit memo for an NSF check received from a customer.What entry is required in the company's accounts?

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.

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)

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

There are three parties to a check.The drawer is

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.

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.