Question 1

Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements.

Accepted Answer

A) True 
 B)False  False

Question 2

A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.

Accepted Answer

A) True 
 B)False

Question 3

Consider the following journal entry made by Jones Company for one day's sales of a single cashier.Upon investigation,what might you find happened to create this amount of Cash Over / Short account difference? Give three possible reasons for this difference.

Accepted Answer

There are many possibilities,but the most likely culprits are as follows:

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)   revenue,credit
B)   asset,debit
C)   liability,credit
D)   expense,debitE) A) and C)
F) All of the above

Question 6

When the petty cash fund is replenished,the petty cash account is credited for the total of all expenditures made since the fund was last replenished.

Accepted Answer

A) True 
 B)False

Question 7

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300.This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)   deduction from the balance per company's records
B)   addition to the balance per bank statement
C)   deduction from the balance per bank statement
D)   addition to the balance per company's recordsE) A) and B)
F) C) and D)

Question 8

The following data were gathered to use in reconciling the bank account of Savannah Company: ​
 What is the adjusted balance on the bank reconciliation?

Accepted Answer

A)   $14,470
B)   $10,705
C)   $15,095
D)   $15,720E) A) and B)
F) B) and D)

Question 9

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.

Accepted Answer

A) True 
 B)False

Question 10

Entries are made to the petty cash account when

Accepted Answer

A)   making payments out of the fund
B)   recording shortages in the fund
C)   replenishing the petty cash fund
D)   establishing the fundE) None of the above
F) A) and C)

Question 11

​"To maintain public confidence and trust in the financial reporting of companies" is the purpose of

Accepted Answer

A)   ​the FASB
B)   ​the IRS
C)   ​Sarbanes-Oxley
D)   ​GAAPE) A) and D)
F) A) and C)

Question 12

​Sarbanes-Oxley applies to

Accepted Answer

A)   ​publicly held companies
B)   ​not-for-profit organizations
C)   ​privately held businesses
D)   all of theseE) None of the above
F) B) and D) A

Question 13

The bank reconciliation is an important part of the system of internal controls.

Accepted Answer

A) True 
 B)False

Question 14

Accompanying the bank statement was a debit memo for an NSF check received from a customer.This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)   deduction from the balance per company's records
B)   addition to the balance per bank statement
C)   deduction from the balance per bank statement
D)   addition to the balance per company's recordsE) All of the above
F) C) and D)

Question 15

Using the following information,prepare a bank reconciliation for Miller Co.for August 31:

Accepted Answer

The answer of Using the following information,prepare a bank reconciliation...

Question 16

A $150 petty cash fund has cash of $54 and receipts of $83.The journal entry to replenish the account would include a

Accepted Answer

A)   credit to Petty Cash for $29
B)   debit to Cash for $83
C)   debit to Cash Short and Over for $13
D)   credit to Cash for $54E) A) and C)
F) A) and B)

Question 17

A voucher system is an example of an internal control procedure over cash payments.

Accepted Answer

A) True 
 B)False

Question 18

The actual cash received during the week ended June 6 for cash sales was $8,276 and the amount indicated by the cash register total was $8,262.Journalize the entry to record the cash receipts and cash sales.

Accepted Answer

The answer of The actual cash received during the week...

Question 19

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

Accepted Answer

A) True 
 B)False

Question 20

All bank memos reported on the bank reconciliation require entries in the company's accounts.

Accepted Answer

A) True 
 B)False

Exam 7: Internal Control and Cash

Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements.

Correct AnswerverifiedFalse

A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.

Correct AnswerverifiedShow Answer

Consider the following journal entry made by Jones Company for one day's sales of a single cashier.Upon investigation,what might you find happened to create this amount of Cash Over / Short account difference? Give three possible reasons for this difference.

Correct AnswerverifiedThere are many possibilities,but the most likely culprits are as follows:

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When the petty cash fund is replenished,the petty cash account is credited for the total of all expenditures made since the fund was last replenished.

Correct AnswerverifiedShow Answer

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300.This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

The following data were gathered to use in reconciling the bank account of Savannah Company: ​ What is the adjusted balance on the bank reconciliation?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Entries are made to the petty cash account when

Correct AnswerverifiedShow Answer

​"To maintain public confidence and trust in the financial reporting of companies" is the purpose of

Correct AnswerverifiedShow Answer

​Sarbanes-Oxley applies to

Correct AnswerverifiedA

The bank reconciliation is an important part of the system of internal controls.

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a debit memo for an NSF check received from a customer.This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

Using the following information,prepare a bank reconciliation for Miller Co.for August 31:

Correct AnswerverifiedShow Answer

A $150 petty cash fund has cash of $54 and receipts of $83.The journal entry to replenish the account would include a

Correct AnswerverifiedShow Answer

A voucher system is an example of an internal control procedure over cash payments.

Correct AnswerverifiedShow Answer

The actual cash received during the week ended June 6 for cash sales was $8,276 and the amount indicated by the cash register total was $8,262.Journalize the entry to record the cash receipts and cash sales.

Correct AnswerverifiedShow Answer

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

Correct AnswerverifiedShow Answer

All bank memos reported on the bank reconciliation require entries in the company's accounts.

Correct AnswerverifiedShow Answer

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False

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There are many possibilities,but the most likely culprits are as follows:

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The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconciliation?

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"To maintain public confidence and trust in the financial reporting of companies" is the purpose of

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Sarbanes-Oxley applies to

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A

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