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

There are three parties to a check. The drawer is

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

Money market accounts, commercial paper, and United States Treasury Notes are examples of cash equivalents.

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

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

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

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.

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would be included in the bank reconciliation as a(n)

Journalize the entries to record the following: Jun 1 Established a petty cash fund of $200 Jun 30 The amount of cash in the petty cash fund is now $57. The fund is replenished based on the following receipts: postage, $25; entertainment $100; miscellaneous $20. Record any discrepancy in the cash short and over account. Journal

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

The following data is from the Miser Company for years ended 2008-2011. Calculate the following:

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

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures. 1. Mandatory vacations 2. Personnel policies 3. Report of outside consultants on future market changes

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

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

A $135 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

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.

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.

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

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.