FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Sarbanes-Oxley, Internal Control, and Cash

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

Multiple Choice

Review LaterAdd Note

Review Later

The objectives of internal control are to

A) control the internal organization of the accounting department personnel and equipment
B) provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with
C) prevent fraud, and promote the social interest of the company
D) provide control over "internal-use only" reports and employee internal conduct

E) A) and D)
F) A) and B)

Correct Answer

verified

Show Answer

Question 82

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following would not be included with the Cash and Equivalents on the Balance Sheet?

A) Commercial Paper
B) Short-Term Receivables
C) Certificates of Deposit
D) Money Market Mutual Funds

E) All of the above
F) None of the above

Correct Answer

verified

Show Answer

Question 83

Multiple Choice

Review LaterAdd Note

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

A voucher

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

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, 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.

A bank statement

Which one of the following below reflects a weak internal control system?

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

You began your new job as the accountant for Morton Company. You were surprised to find that the company had a $2,000 petty cash fund, which sits in the break room. The President of the company told you: "Our petty cash system here works quite smoothly. Since everyone is honest here, everyone has access to the fund for incidentals that might pop up in the course of the business day. Most of these situations don't have any receipts tied to them, so I just put the money back in the fund when my secretary tells me that we have run out and debit the amount to Miscellaneous Expense." Required: (a) Should you implement some controls on petty cash? Why? (b) If so, what controls could be used for petty cash?

A bank reconciliation should be prepared periodically because

The debit balance in Cash Short and Over at the end of an accounting period is reported as

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

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. Prepare a bank reconciliation on the basis of the following reconciling items:

Journalize the following petty cash transactions. (a) On August 3rd, Sonar Sales decides to establish a $275.00 petty cash account to relieve the burden on Accounting. (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.

The type of account and normal balance of Petty Cash is a(n)

There are two internal control objectives and they are to ensure accurate financial reports, and ensure compliance with applicable laws.

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.

List and define each of the five elements of internal control.

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is