ACCT 472.21 Ch.7

Which of the following would not be reported on the balance sheet as a cash equivalent

Six-month Treasury bill

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

segregation of duties.

Allowing only the treasurer to sign checks is an example of

establishment of responsibility.

All of the following requirements about internal controls were enacted under the Sarbanes- Oxley Act except

All of the following requirements about internal controls were enacted under the Sarbanes- Oxley Act except

Shane Company gathered the following reconciling information in preparing its April bank reconciliation:

. $8,330.

In the month of November, Kinsey Company Inc. wrote checks in the amount of $9,250. In December, checks in the amount of $12,658 were written. In November, $8,468 of these checks were presented to the bank for payment, and $10,883 were presented in December. What is the amount of outstanding checks at the end of December?

$2,557

Internal auditors

evaluate the system of internal controls for the companies that employ them.

Internal control is defined, in part, as a plan that safeguards

assets.

If employees are bonded

they have been insured against misappropriation of assets

Cash equivalents include each of the following except

petty cash.

In preparing its bank reconciliation for the month of April 2013, Delano, Inc. has available the following information

$39,100.

At June 30, Yaddof Company has the following bank information: cash balance per bank $3,600; outstanding checks $680; deposits in transit $550; credit memo for interest $150; bank service charge $20. What is Yaddof adjusted cash balance on June 30?

$3,470

The control principle related to not having the same person authorize and pay for goods is known as

segregation of duties

The most important element of the fraud triangle is

opportunity.

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

increases the potential for errors and fraud.

The cash account shows a balance of $45,000 before reconciliation. The bank statement does not include a deposit of $2,500 made on the last day of the month. The bank statement shows a collection by the bank of $1,200 and a customer’s check for $320 was returned because it was NSF. A customer’s check for $450 was recorded on the books as $540, and a check written for $69 was recorded as $96. The correct balance in the cash account was

$45,817.

Two individuals at a retail store work the same cash register. You evaluate this situation

a violation of establishment of responsibility

The principles of internal control include all of the following except

. combining of duties.

The daily cash count of cash register receipts made by department supervisors is an example of

independent internal verification

Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

segregation of duties

Which of the following is not one of the main factors that contribute to fraudulent activity

Incompatible duties

Internal control is defined, in part, as a plan that safeguards

. assets

Blank checks

should be safeguarded

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

increases the potential for errors and fraud.

Winter Gloves Company had checks outstanding totaling $6,400 on its May bank reconciliation. In June, Winter Gloves Company issued checks totaling $39,900. The July bank statement shows that $35,700 in checks cleared the bank in July. A check from one of Winter Gloves Company’s customers in the amount of $1,000 was also returned marked "NSF." The amount of outstanding checks on Winter Gloves Company’s July bank reconciliation should be

10,600

In preparing a bank reconciliation, outstanding checks are

deducted from the balance per bank.

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

segregation of duties is violated.

When opening a bank checking account, a signature card

indicates each person authorized to sign checks on the account.

Each of the following items affect the cash balance per books except

outstanding checks.

Reconciling the bank statement monthly is an example of

independent internal verification

If a check correctly written and paid by the bank for $418 is incorrectly recorded on the company’s books for $481, the appropriate treatment on the bank reconciliation would be to

add $63 to the book’s balance

Deposits in transit

have been recorded on the company’s books but not yet by the bank

The custodian of a company asset should

not have access to the accounting records for that asset

Allowing only the treasurer to sign checks is an example of

establishment of responsibility.

In preparing its bank reconciliation for the month of April 2013, Haskins, Inc. has available the following informatio

23,880.

A system of internal control

B. can be rendered ineffective by employee collusion.

Hoppmann Company wrote checks totaling $8,540 during October and $9,325 during November. $8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November. What was the amount of outstanding checks on November 30?

C. $635

Unicycle Company developed the following reconciling information in preparing its September bank reconciliation:

B. $3,775.

The cash account shows a balance of $45,000 before reconciliation. The bank statement does not include a deposit of $2,500 made on the last day of the month. The bank statement shows a collection by the bank of $1,200 and a customer’s check for $320 was returned because it was NSF. A customer’s check for $450 was recorded on the books as $540, and a check written for $69 was recorded as $96. The correct balance in the cash account was

B. $45,817.

Which one of the following items would not be considered cash?

D. Postdated checks

Bacher Company developed the following reconciling information in preparing its September bank reconciliation:

A. $7,085

Fitzgerald Company wrote checks totaling $17,080 during October and $18,650 during November. $16,240 of these checks cleared the bank in October, and $18,220 cleared the bank in November. What was the amount of outstanding checks on November 30?

C. $1,270

An application of good internal control over cash disbursements is

following payment, the approved invoice should be stamped PAID

Control over cash disbursements is generally more effective when

payments are made by check.

Which of the following would not be considered cash equivalent

Notes receivable

Shane Company gathered the following reconciling information in preparing its April bank reconciliation:

The adjusted cash balance per books on April 30 is

$8,330

Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $3,820; outstanding checks $775; deposits in transit $1,250; NSF check $80; bank service charge $25; cash balance per books $4,400. As a result of this reconciliation, Carothers will

reduce its cash account by $105.

Checks received through the mail should

immediately be endorsed "For Deposit Only."

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation:

The adjusted cash balance per books on July 31 is

$6,410.

Which of the following would not be reported on the balance sheet as a cash equivalent?

C. Six-month Treasury bill

A petty cash fund should be replenished

B. at the end of every accounting period.

A check returned by the bank marked "NSF" means

D. not sufficient funds.

On a bank reconciliation, deposits in transit are

A. added to the bank balance.

At April 30, Yaddof Company has the following bank information: cash balance per bank $4,600; outstanding checks $780; deposits in transit $550; credit memo for interest $100; bank service charge $20. What is Yaddof’s adjusted cash balance on April 30?

A. $4,370

The principle of establishing responsibility does not include

C. independent internal verification.

In preparing its August 31, 2013 bank reconciliation, Annie Corp. has available the following information:

C. $22,800.