Exam 4: Internal Controls,accounting for Cash,and Ethics

While preparing its bank reconciliation,Mart Company determined that its bank had collected for the company an account receivable in the amount of $950.The bank deducted a $15 collection fee.Which of the following shows the effect of the above event on the financial statements?

The May 31,2012,balance per bank statement for Upton Company was $7,200.The cash balance per books was $9,500.Outstanding checks amounted to $800,and deposits in transit were $2,400.The bank statement contained an NSF check for $500,a service charge for $25,and a debit memo for direct payment of the telephone bill of $175. Required: Prepare a bank reconciliation to determine the true cash balance at May 31,2012.

For the month of July 2012,Wheeler Company's bank statement contained the following information: 1)The bank had collected a $3,000 account receivable for the company. 2)The bank charged Wheeler $45 for various service fees during the month. 3)The checking account earned $28 in interest during the month. Required: Indicate how each of the three items listed would affect Wheeler's financial statements.Show dollar amounts of increases and decreases; enter "NA" if a given element of the financial statements is not affected by the item.Indicate whether each cash flow is an operating (OA),investing (IA),or financing (FA)activity.

A company's outside,independent auditors are responsible for expressing an opinion on the company's financial statements.

A company's outside,independent auditors are responsible for preparing its financial statements.

In preparing a bank reconciliation,is a deposit in transit an adjustment to the book balance,the bank balance,or neither?

Which of the following would result in the impairment of the auditor's independence?

Which of the following is not a reason why a business needs strong internal controls over cash?

In preparing bank reconciliations,typical adjustments to the bank balance include

A bank reconciliation adjusts both the cash balance reported by the bank and the book cash balance to the true cash balance.

A business's administrative controls are concerned with

What documentation issued by a bank decreases the balance in a company's checking account balance at the bank?

For each of the following items,indicate whether it is an adjustment to the bank side,the book side,or not applicable when preparing a bank reconciliation.For each adjustment item,indicate whether the amount would be added or subtracted.

Preparing a bank reconciliation is an important internal control for a business.

In performing bank reconciliations,outstanding checks are

During the reconciliation process an accountant for Snyder Company discovered that Check #4261 for $136 for an Accounts Payable payment was recorded in the company books as $163.

In a company's bank reconciliation,an outstanding check is a check that:

During the reconciliation process an accountant for Shalimar Corporation discovered that Check #4901 for $552 for an Accounts Payable payment was recorded in the company books as $525.

List three internal control procedures that should be followed to safeguard cash and reduce the likelihood of theft.

Which of the item(s)would be subtracted from the company's unadjusted book balance to determine the true cash balance?