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20 Cards in this Set
- Front
- Back
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Two individuals at a retail store work the same cash register. You evaluate this situation as |
a violation of establishment of responsibility.
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Physical controls to safeguard assets do not include |
cashier department supervisors. |
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If employees are bonded |
they have been insured against misappropriation of assets. |
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Mrs. Smith has worked for Bosco Inc. for 20 years without taking a vacation. An internal control feature that would address this situation would be |
human resource controls. |
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Ron Jones has been a trusted employee for over 10 years. He is responsible for ordering merchandise inventory, receiving the inventory items, and authorizing the payment for these items. Which internal control principle, if any, is being violated?
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Segregation of duties.
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Supervisors counting cash receipts daily is an example of |
independent internal verification. |
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Control over cash disbursements is generally more effective when |
payments are made by check |
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An exception to disbursements being made by check is acceptable when cash is paid |
from petty cash |
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A check returned by the bank marked "NSF" means |
not sufficient funds. |
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Deposits in transit |
have been recorded on the company's books but not yet by the bank.
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If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682, the appropriate treatment on the bank reconciliation would be to |
add $54 to the book's balance.
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Which of the following bank reconciliation items would not result in an adjusting entry? |
Deposits in transit. |
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Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry: |
-Accounts Receivable -Cash |
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Nilson Company gathered the following reconciling information in preparing its August bank reconciliation:
Cash balance per books, 8/31 $21,000 Deposits in transit 900 Notes receivable and interest collected by bank 5,100 Bank charge for check printing 120 Outstanding checks 12,000 NSF check 1,020
The adjusted cash balance per books on August 31 is |
$24,960 |
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At April 30, Kessler Company has the following bank information:
Cash balance per bank$11,500 Outstanding checks$700 Deposits in transit$1,375 Credit memo for interest$25 Bank service charge$50
What is Kessler’s adjusted cash balance on April 30? |
$12,175 |
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A check written by the company for $275 is incorrectly recorded by a company as $257. On the bank reconciliation, the $18 error should be |
deducted from the balance per books. |
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Cash equivalents do not include |
long-term investment |
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Which of the following is not a basic principle of cash management? |
keep inventory levels high. |
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Petersen Company is preparing a cash budget for September. The company’s cash balance on September 1 is $17,400. The company anticipates cash receipts of $83,850 and cash disbursements of $87,990. If Petersen desires a cash balance of $18,000, it must |
acquire financing of $4,740. |
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A company’s past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were:
July $240,000 August 144,000 September 360,000
The cash inflow in the month of September is expected to be |
$271,200. |
