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Exam 4: Cash and Internal Controls

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Question 51

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Listed below are five terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Matches the balance of cash in the bank account with the balance of cash in the company's own records.

A) Cash equivalent
B) Bank reconciliation
C) Petty cash
D) Debit card
E) Credit card

F) B) and E)
G) A) and B)

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Question 52

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Which of the following is correct regarding a petty cash fund?

A) Petty cash fund represents cash on hand at the business for quick access.
B) Petty cash fund is used for minor purposes.
C) When cash from this fund is taken out,it should be replaced with a voucher.
D) All of the above are correct.

E) A) and B)
F) A) and C)

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Question 53

Multiple Choice

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Cash transactions that have been recorded by the company but not the bank include:

What key piece of legislation was passed in response to corporate accounting scandals by Enron,WorldCom,and others?

Which of the following is not an example of preventive controls?

Under the provisions of the Sarbanes-Oxley Act,auditors must do which of the following?

The amount of cash reported in a company's balance sheet includes currency,coins,and balances in savings and checking accounts,as well as items acceptable for deposit in these accounts,such as checks received from customers.

A company's bank statement shows a cash balance of $4,170.Comparing the company's cash records with the monthly bank statement reveals several additional cash transactions such as checks outstanding of $2,110,NSF check of $200,interest earned of $30,service fee of $40,and a check for $150 recorded twice by the company.Calculate the correct balance of cash.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Management must document the effectiveness of procedures that could affect financial reporting.

Listed below are five terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Short-term investments that have a maturity date no longer than three months from the date of purchase.

Which employees have an impact on the operation and effectiveness of internal controls?

Checking actual outcome of individuals or processes against their expected outcome is an example of which detective control?

After preparing a bank reconciliation,the service fee charged by the bank would be recorded with a:

Which of the following would NOT represent good controls over cash disbursements?

At the beginning of the current year,a company issued stock for $100,000 and borrowed $50,000 from the bank.By the end of the year,the company had provided services of $80,000 for cash,paid employee salaries of $30,000,and paid utilities of $10,000.Determine the amount of financing cash flows the company will report in the current year.

After preparing a bank reconciliation,a check outstanding for the payment of advertising would be recorded with a:

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Executives must personally certify the financial statements.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Audit firm cannot provide a variety of other services to its client,such as consulting.

Cash flows from investing activities do not include:

The following data were obtained from the bank statement and from the process of reconciling it: Bank service charges = $ 20 Deposit outstanding = $150 Interest earned on the bank account = $10 Checks outstanding = $400 Which items should be deducted from and added to the bank balance in completing the reconciliation?