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Exam 6: Reporting and Analyzing Cash,fraud,and Internal Control

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Question 31

True/False

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Outstanding checks are checks the bank has paid and deducted from the customer's account during the month.

A) True
B) False

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Question 32

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All of the following are considered effective cash management principles except:

A) Encouraging collection of receivables by offering discounts for early payments.
B) Keeping only necessary levels of assets.
C) Planning expenditures.
D) Retaining excess cash for unexpected expenditures.
E) Delaying payment of liabilities until the last possible day.

F) A) and B)
G) All of the above

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Question 33

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An analysis that explains differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a(n) :

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

A company had net sales of $21,500 and ending accounts receivable of $2,700 for the current period.Its days' sales uncollected equals: (Use 365 days a year.)

The following account balances are taken from Everest Events at December 31. Calculate the number of days' sales uncollected for both years.According to this analysis,is the company's collection of receivables improving? Explain.

A ________ is an internal document (or file)that is used to accumulate information to control cash disbursements.

On June 1,a company established a $75 petty cash fund.On June 27,the petty cash fund contains $5.25 in cash and the following paid petty cash receipts: postage,$19.50; office supplies,$36.25; and miscellaneous expense $14.00.Give the general journal entry to reimburse the fund on June 27.

The payee is the person who signs a check,authorizing its payment.

Describe a petty cash account and its purpose.

A seller (or provider) of goods or services to a business organization is known as a:

The number of days' sales uncollected is calculated by:

Assume that the custodian of a $450 petty cash fund has $62 in coins and currency plus $383 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

The following information is available for the Topper Company for the month of July. a.On July 31,after all transactions have been recorded,the balance in the company's Cash account has a balance of $15,244. b.The company's bank statement shows a balance on July of $16,450. c.Outstanding checks at July total $2,063. d.A credit memo included with the bank statement indicates that the bank collected $570 on a note receivable for Topper.The $570 includes $550 principle and $20 interest. e.A debit memo included with the bank statement shows a $107 NSF check from a customer,P.Flank. f.A deposit placed in the bank's night depository on July 31 totaling $1,275 did not appear on the bank statement. h.Included with the bank statement was a debit memorandum in the amount of $45 for check printing charges that have not been recorded on the company's books. Prepare the July bank reconciliation for the Topper Company.

The Petty Cash account is a separate bank account used for small amounts.

A company wants to decrease its $200 petty cash fund to $175.The entry to reduce the fund is:

The itemized statement of goods prepared by a vendor listing the customer's name,items sold,sales prices,and terms of the sale is called the:

The following information is available for the Savvy Company for the month of June. a.On June 30,after all transactions have been recorded,the balance in the company's Cash account has a balance of $17,202. b.The company's bank statement shows a balance on June 30 of $19,279. c.Outstanding checks at June 30 total $2,984. d.A credit memo included with the bank statement indicates that the bank collected $770 on a noninterest-bearing note receivable for Savvy. e.A debit memo included with the bank statement shows a $67 NSF check from a customer,J.Maroon. f.A deposit placed in the bank's night depository on June 30 totaling $1,675 did not appear on the bank statement. g.Comparing the checks on the bank statement with the entries in the accounting records reveals that check #3445 for the payment of an account payable was correctly written for $2,450,but was recorded in the accounting records as $2,540. h.Included with the bank statement was a debit memorandum in the amount of $25 for bank service charges.It has not been recorded on the company's books. 1.Prepare the June bank reconciliation for the Savvy Company. 2.Prepare the general journal entries to bring the company's book balance of cash into conformity with the reconciled balance as of June 30.

The following information is available for the Victor Company for its March 31 bank reconciliation: From the March 31 bank statement: NSF: A check from a customer,Booker Co.in payment of their account. IN: Interest earned on the account. From the Victor Company's accounting records: 1.Based on the above information,prepare a bank reconciliation for the Victor Company. 2.Prepare the necessary general journal entries to adjust cash to the reconciled balance.

Deposits made and recorded by the depositor but not yet recorded on the bank statement are called ________.