Question 1

Identify the three activities that pertain to a petty cash fund and indicate an internal control principle that is applicable to each activity. (b) When are journal entries required in the operation of a petty cash fund?

Accepted Answer

The answer of Identify the three activities that pertain to...

Question 2

The preparation of a bank reconciliation is an important cash control procedure. If a company deposits cash receipts daily and makes all cash disbursements by check explain why the cash balance per books might not agree with the cash balance shown on the bank statement. Identify specific examples that may cause differences between the cash balance per books and the cash balance per bank.

Accepted Answer

The answer of The preparation of a bank reconciliation is...

Question 3

Match between columns
                        Premises: Segregation of duties.
One to whom a check is payable.
Two or more employees circumventing prescribed procedures.
Prevent a transaction from being  recorded more than once.
Checks which have been returned by the maker's bank  for lack of funds.
Checks which have been paid by the depositor's bank.
Indicates those people authorized to sign checks.
Anything that a bank will accept for deposit.
Mechanical and electronic control devices.
One who issues a check.
Insurance protection against misappropriation of assets.
An extensive network of approvals by authorized individuals.
Document indicating the purpose of a petty cash expenditure.
Issued checks that have not been paid by the bank.
Highly liquid investments.

Accepted Answer

The Answer of Prenumbered documents and Custody of an asset is...

Question 4

Match between columns
                        Premises: Included with the bank statement materials was a check from Bob Simpson for $40 stamped "account closed."
A personal deposit by Annie Walker to her personal account in the amount of $300 for dividends on her General Electric common stock was credited to the company account.
The bank statement included a debit memorandum for $22.00 for two books of blank checks for Walker Machine Works.
The bank statement contains a credit memorandum for $24.75 interest on the average checking account balance.
The daily deposits of March 30 and March 31, for $3,362 and $3,125 respectively, were not included in the bank statement postings.
Two checks totaling $316.86, which were outstanding at the end of February, cleared in March and were returned with the March statement.
The bank statement included a credit memorandum dated March 28, 2014, for $45.00 for the monthly interest on a 6-month, $15,000 certificate of deposit that the company owns.
Four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank during March.
On March 24, 2014, Walker Machine Works delivered to the bank for collection a $2,500, 3-month note from Don Decker. A credit memorandum dated March 29, 2014, indicated the collection of the note and $90.00 of interest.
The bank statement included a debit memorandum for $25.00 for the collection service on the above note and interest.

Accepted Answer

The Answer of Add to the cash balance per books is...

Question 5

Match between columns
                        Premises: Outstanding checks.
Bank service charge.
Check for $320 correctly written and paid by the bank but incorrectly entered in the cash payments journal for $230.
Deposit in transit.
Bank returns deposited check marked NSF.
Bank collects notes receivable and interest for depositor.
Bank debit memorandum for check printing fees.
Petty cash custodian has $91 in paid petty cash vouchers that have not been reimbursed.
Bank charged a check against the company which should have been charged to another company.
A check for $158 was correctly paid by the bank but was incorrectly entered in the cash payments journal for $185.

Accepted Answer

The Answer of Add to cash balance per books and is...

Question 6

Match between columns
                        Premises: Compare checks to invoices.
Different individuals approve and make payments.
Print check amounts by machine with indelible ink.
Only designated personnel are authorized to sign checks.
Each check must have approved invoice.
Requiring employees to take vacations.

Accepted Answer

The Answer of Establishment of responsibility and Segregation of duties is...

Question 7

Match between columns
                        Premises: Only designated personnel are authorized to handle cash receipts.
Different individuals receive cash and record cash receipts.
Use remittance advice and cash register tapes.
Store cash in safes and bank vaults.
Treasurer compares total receipts to bank deposits daily.
Bonding of employees that handle cash.

Accepted Answer

The Answer of Documentation procedures and Establishment of responsibility and is...

Question 8

Match between columns
                        Premises: An employee steals the cash collected from a customer for an account receivable and conceals this theft by issuing a credit memorandum indicating that the customer returned the merchandise.
A small fire destroys 3 days of cash receipts.
The official designated to sign checks is able to steal blank checks and issue them without fear of detection.
A salesclerk in serving customers often rings up a sale for less than the actual amount and then keeps the additional cash collected from the customer.
Three cashiers use one cash register drawer and the cash in the drawer is often short of the balance kept on hand.
Each cashier counts his own register drawer each day and verbally reports the results to the supervisor.
Cashiers with over 5 years’ experience are not bonded.

Accepted Answer

The Answer of Establishment of responsibility and Segregation of duties is...

Question 9

Match between columns
                        Premises: The same person opens incoming mail and posts the accounts receivable subsidiary ledger.
Three people handle cash sales from the same cash register drawer.
A clothing store is experiencing a high level of inventory shortages because people try on clothing and walk out of the store without paying for the merchandise.
The person who is authorized to sign checks approves purchase orders for payment.
Some cash payments are not recorded because checks are not prenumbered.
Cash shortages are not discovered because there are no daily cash counts by supervisors.
The treasurer of the company has not taken a vacation for over 20 years.

Accepted Answer

The Answer of Establishment of responsibility and Segregation of duties is...

Question 10

Match between columns
                        Premises: Involves the review, comparison, and reconciliation of data prepared by other employees.
Provide evidence that transactions and events have occurred.
Includes the authorization and approval of transactions.
Rotating employees' duties and requiring employees to take vacations.
Related activities should be assigned to different individuals.
Using garment sensors to deter theft.

Accepted Answer

The Answer of Establishment of responsibility and Segregation of duties is...

Quiz 8: Fraud, Internal Control, and Cash

Identify the three activities that pertain to a petty cash fund and indicate an internal control principle that is applicable to each activity. (b) When are journal entries required in the operation of a petty cash fund?

Match the items below

Listed below are items that may be useful in preparing the March 2014, bank reconciliation for Walker Machine Works. Insert where the amount would be located or otherwise treated in the bank reconciliation process.

Indicate how each of the items listed would be handled in preparing a bank reconciliation

Match the appropriate cash disbursements procedure described below with the internal control principle.

Match the appropriate cash receipts procedure described below with the internal control principle.

Below are descriptions of internal control problems. Enter the code letter of the one best internal control principle that is related to the problem described.

Match the appropriate description below with each of the following principles of internal control.