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

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

The actual cash received during the week ended October 31 for cash sales was $23,447.00 and the amount indicated by the cash register total was $23,457.00. Journalize the entry to record the cash receipts and cash sales. Journal

Credit memos from the bank

A bank reconciliation should be prepared periodically because

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.

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.

Journal entries based on the bank reconciliation are required in the company's accounts for

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 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.

The bank reconciles its statement to the company's records.

Which one of the following below is not an element of internal control?

A person authorized to write checks drawn on a checking account at a bank must sign and have on file with the bank a

Groceries R Us, Inc. reported the following date in it's December 31, 2011 annual report. Cash and cash equivalents $2,280,000 Cash flow from operations (240,000) (1) What is the company's "cash burn" per month? (2) What is the company's ratio of cash to monthly cash expenses? (3) Interpret the ratio you computed in part 2. What are the implications for Groceries R Us, Inc.?

Consider the cash account below. Additional Information: cash disbursements were 80% of collections. How much was the Beginning Balance of the Cash Account?

An example of good internal controls over cash payments is the taking of all cash discounts offered.

A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts?

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

Which of the following is not an internal control activity for cash?

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.

In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records.