Exam 6: Cash and Internal Control

Which of the following statements is trueregarding a credit memorandum?

Which one of the following is not a generally recognized internal control procedure?

A good system of internal controls requires that the physical custody of assets be separated from the accounting for those assets.This concept is known as safeguarding assets and records.

Which one of the following is considered one of the six most important categories of internal control procedures?

A(n)_________________ is a form the accounting department uses before making payment to document the accuracy of all information about a purchase.

Which of the following represents a group composed of key officers of a corporation and outside members responsible for the general oversight of the affairs of the company?

A check written by a company but not yet presented to the bank for payment is called a(n)_________________________.

Effective cash management and control includes all of the following except

_________________________ describes a form used by the accountant to reconcile the balance shown on the bank statement for a particular account with the balance shown in the accounting records.

Administrative controls

The use of customer statements as a control device will be effective only if the employees responsible for the custody of cash received through the mail,for record keeping,and for authorization of adjustments to customers' accounts are not allowed to prepare and mail statements to customers.

A purchase order is not the basis for recording a purchase and a liability.

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 from the accounting department compares the control list and the cash register tapes with the bank deposit slip.

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. Cash register tapes are picked up daily by an employee from the accounting department.

The accountant for Darden Corp.was preparing a bank reconciliation as of April 30,2014.The following items were identified: In addition,Darden made an error in recording a customer's check;the amount was recorded in cash receipts as $150;the bank recorded the amount correctly as $510.What amount will Darden report as its adjusted cash balance at April 30,2014?

Use the data presented below which Raines Corp.identified in preparing a bank reconciliation on October 31,2014,to answer the questions that follow. What is the net amount of the increase or decrease in Raines' cash balance which must be recorded as a result of the adjustments identified by the bank reconciliation?

____________________ controls primarily concern safeguarding of assets and ensuring the reliability of the financial statements.

One concern of the internal auditor is the efficiency with which the organization is run.

How would bank service charges be dealt with in a bank reconciliation?

McDonald's Corporation is the largest food service organization in the world.The proper handling of cash and food is important to the profitability of McDonald's.Based on your personal knowledge of McDonald's and the internal control concepts and procedures described in the textbook,answer the following questions. REQUIRED: Describe procedures that you believe McDonald's may use to control cash receipts.