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

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)

The Scharf Company is a retailer located in a state without sales tax. The following data was given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change. Record the Journal Entries for EACH cash register to determine the cashier's accuracy.

Cash equivalents include

The bank reconciliation is an important part of the system of internal controls.

On the bank's accounting records, customers' accounts are normally shown as

Cash equivalents are short -term investments that will be converted to cash within 120 days.

A payment system that uses computerized electronic impulses to effect a cash transaction is called electronic funds transfer (EFT).

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

Receipts from cash sales of $7,500 were recorded incorrectly in the cash receipts journal as $5,700. What entry is required in the company's accounts?

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.

Accompanying a bank statement for Marsh Land Properties is a credit memo for $15,475, representing the principal ($15,000) and interest ($475) on a note that had been collected by the bank. Marsh Land Properties had been notified by the bank at the time of collection, but had made no entries. Journalize the entry that should be made by Marsh Land to bring the accounting records up to date.

The debit recorded in the journal to reimburse the petty cash fund is to

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?

All bank memos reported on the bank reconciliation require entries in the company's accounts.

Harris Company had checks outstanding totaling $15,400 on its May bank reconciliation. In June, Harris Company issued checks totaling $64,900. The June bank statement shows that $37,600 in checks cleared the bank in June. A check from one of Harris Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Harris Company's June bank reconciliation should be

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an "other income" item on the income statement.

Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.

A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. What entry is required in the company's accounts?

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