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Exam 8: Sarbanes-Oxley, Internal Control, and Cash

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Question 91

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Distinguish preventive controls from detective controls and give examples of each as they relate to cash.

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Preventive controls are to protect cash ...

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Question 92

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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.

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B) False

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Question 93

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Harris Company had checks outstanding totaling $15,400 on its May bank reconciliation. In June, Harris Company issued checks totaling $64,900. The June bank statement shows that $47,600 in checks cleared the bank in June. A check from one of Harris Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Harris Company's June bank reconciliation should be

Thompson Company developed the following reconciling information in preparing its October bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.

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.

A necessary element of internal control is

A backlog in recording transactions is an example of a warning sign from the accounting system.

The Scharf Company is a retailer located in a state without sales tax. The following data was given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change. Record the Journal Entries for EACH cash register to determine the cashier's accuracy. First item for the student to remember is that EACH cash drawer starts with $100. This must be subtracted from the total cash in drawer to determine the cash over/short amount.

A bank statement

In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

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?

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Present entries to record the following transactions:

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

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?