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Exam 6: Cash and Internal Controls

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Question 71

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The _________________ account is used to record the effects of cash overages and shortages from errors in making change.

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Question 72

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On a bank statement, deposits are shown as __________________, because the depositor's account is a liability on the bank's records.

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Question 73

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An internal control system refers to the policies and procedures managers use to __________, ensure reliable accounting, promote efficient operations and urge adherence to company policies.

A company established a petty cash fund in May of the current year and experienced the following transactions affecting the fund during May: May 1 Establish petty cash account in the amount of $300 May 5 Paid for miscellaneous office supplies in the amount of $53.22 May 9 Reimbursed Human Resource Manager for business lunch, $45.09 May 15 Paid for minor landscaping services, $75.00 May 22 Paid $65.00 for postage May 31 Counted remaining cash and discovered that $56.34 remained Prepare the journal entry to reimburse the fund on May 31.

What are the checks that must be completed prior to the completion of invoice approval and voucher preparation?

A company established a petty cash fund in May of the current year and experienced the following transactions affecting the fund during May: May 1 Establish petty cash account in the amount of $300 May 5 Paid for miscellaneous office supplies in the amount of $53.22 May 9 Reimbursed Human Resource Manager for business lunch, $45.09 May 15 Paid for minor landscaping services, $75.00 May 22 Paid $65.00 for postage May 31 Counted remaining cash and discovered that $56.34 remained Prepare the journal entry to establish the fund on May 1.

What is the purpose of the days' sales uncollected ratio?

What are some of the risks for a company converting from GAAP to IFRS?

At the end of the current period, a company reported $475,000 in net credit sales and $75,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

Collusion is when a person embezzles money from a company and tries to hide the evidence.

For good internal controls over cash, all payments should be made from the petty cash, except for very large payments.

A ____________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

The internal document that is prepared to notify the appropriate persons that ordered goods have been received and describes the quantities and condition of the goods is the

When merchandise is needed, a department manager must inform the purchasing department of this need by preparing and signing a purchase requisition, which lists the merchandise needed and requests that it be purchased.

Assume that at the end of the day, the cash register tape shows a balance of $635. However, the cash drawer has a balance of $650, this difference should be debited to Miscellaneous Expense.

In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that check number 2889 for December's utilities was correctly written and drawn for $970, but was erroneously entered in the accounting records as $790. The journal entry to adjust the books for the bank reconciliation would include which of the following for this situation?

A company had $43 missing from petty cash which was not accounted for by petty cash receipts. The correct procedure is to:

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

The days' sales uncollected ratio reflects on the liquidity of accounts receivable.

List the main principles of internal controls.