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

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Question 1

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Using the following information, prepare a bank reconciliation for Young Co. for August 31, 2014:

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Question 2

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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.

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A business that requires all cash payments be made by check can use a petty cash system.

Which of the following would be subtracted from the balance per bank on a bank reconciliation?

Using the following information, prepare a bank reconciliation for Cole Co. for May 31, 2011:

Which of the following would not be included with the Cash and Equivalents on the Balance Sheet?

Identify each of the following reconciling items as (a) an addition to the cash balance according to the bank statement, (b) deduction from the cash balance according to the bank statement, (c) an addition to the cash balance according to the company's records, or (d) a deduction from the cash balance according to the company's records. Assume that none of the transactions reported by bank debit and credit memos have been recorded by the company. Also, indicate by writing (Entry) those items that will require a journal entry in the company's accounts.

The following items may appear on a bank statement: Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account. Use the following format:

In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.

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)

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

In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Journalize the entries to record the following: Journal

In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.

The Sarbanes-Oxley Act of 2002 was passed by Congress due to the public outcry after the financial scandals of the early 2000s.

Accompanying the bank statement was a debit memo for bank service charges. What entry is required in the company's accounts?

Internal control is enhanced by separating the control of a transaction from the record-keeping function.

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

Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately on the balance sheet.