Exam 6: Cash and Internal Control

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures. Checks are signed by designated officers in the finance department.

A check written by a company but not yet presented to the bank for payment is called a check in transit.

If a company erroneously records a $500 deposit as $400 in its books,which of the following must occur when reconciling the bank statement?

An accounting system must be computerized in order to ensure the company has proper internal control.

An amount recorded as an increase in the company's cash account at month-end,but which has not yet been reflected on the bank statement is called a(n)_________________________.

Each of the following documents is used in the control of cash receipts except:

The following set of items describes activities completed by a company in collecting cash for merchandise sales.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures. An employee in the accounting department records cash receipts from customers and prepares a bank deposit slip.

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures. All documents attached to an invoice approval form are canceled before a check is signed.

How are cash equivalents reported or disclosed in the financial statements?

Which of the following is an example of a debit memorandum?

Gentech Corp.prepared a bank reconciliation as of June 30,2014.The following items were identified: Gentech's adjusted cash balance at June 30,2014 is

What is the typical composition of a board of directors of a publicly held corporation?

A debit memorandum appeared on Cinco Inc.'s May bank statement.How will Cinco treat this amount on its May bank reconciliation?

Typically the classification known as readily available refers to investments that are converted into cash in _______________ months or less.

When a bank pays interest or collects an amount owed to a company by one of the bank's customers,the bank issues a debit memorandum.

Explain how a company can control small payments that must be made in cash rather than by check.

Pierce Corp.identified the following data in preparing a bank reconciliation on October 31,2014. What is the net amount of the adjustments to Pierce's cash balance as a result of the bank reconciliation?

What is the form sent by the seller to the buyer as evidence of a sale?

Realistic Sound's unadjusted bank balance amounted to $3,000.Outstanding checks amounted to $500 and deposits in transit totaled $300.Based on this information alone,Realistic's adjusted cash balance is:

Which internal control procedure is followed when management authorizes the purchasing department to order goods and services for the company?