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

After a bank reconciliation is completed, adjusting entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

During a bank reconciliation process,

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 voucher system is an example of an internal control procedure over cash payments.

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

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?

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?

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

Describe the features of a voucher system and list typical supporting documents for a voucher.

An example of a preventive control is

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)

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. First item for the student to remember is that EACH cash drawer starts with $100. This must be subtracted from the total cash in drawer to determine the cash over/short amount.

Internal control does not consist of policies and procedures that

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

A $140 petty cash fund has cash of $20 and receipts of $117. The journal entry to replenish the account would include a credit to

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

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.

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

A $100 petty cash fund contains $91 in petty cash receipts, and $4.75 in currency and coins. The journal entry to record the replenishment of the fund would include a

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is