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Exam 7: Fraud, Internal Control, and Cash

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Question 51

Multiple Choice

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Related selling activities do not include

A) ordering the merchandise.
B) making a sale.
C) shipping the goods.
D) billing the customer.

E) A) and D)
F) C) and D)

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Question 52

True/False

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The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.

A) True
B) False

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Question 53

Multiple Choice

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When opening a bank checking account, a signature card

If a petty cash fund is established in the amount of $250, and contains $153 in cash and $94 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

A $100 petty cash fund has cash of $17 and receipts of $86. The journal entry to replenish the account would include a

The use of remittance advices for mail receipts is an example of

Physical controls to safeguard assets do not include

Proper control for over-the-counter cash receipts includes

The daily cash count of cash register receipts made by department supervisors is an example of

A deposit made by a company will appear on the bank statement as a

An example of poor internal control is

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

In preparing its August 31, 2018 bank reconciliation, Annie Corp. has available the following information: At August 31, 2018, Annie's adjusted cash balance is

In large companies, the independent internal verification procedure is often assigned to

Joe Foss has worked for Dr. Sam Milton for several years. Joe demonstrates a loyalty that is rare among employees. He hasn't taken a vacation in the last three years. One of Joe's primary duties at the medical office is to open the mail and list the checks received. He also takes cash from patients at the cashier window as patients leave. At times it is so hectic that Joe doesn't bother with giving each patient a receipt for the cash paid on their accounts. He assures them he will see to it that they receive the proper credit. When the traffic is slow in the office, Joe offers to help Ann post the payments to the patients' accounts receivable. She is always happy to receive his help, because he is a very conscientious worker. Instructions Identify any principles of internal control that may be violated in this medical office situation.

Identify whether each of the following items would be (a) added to the book balance, (b) deducted from the book balance in a bank reconciliation, (c) added to the bank balance, or (d) deducted from the bank balance. 1. Deposits in transit 2. Bank service charge 3. Collection of note and interest by bank on company's behalf 4. NSF check 5. Outstanding checks

Indicate how each of the following items would be shown on a bank reconciliation. 1. Bank error (The bank charged our account with another company's check) 2. Check printing charge 3. Deposits in transit 4. Note collected by the bank 5. NSF checks 6. Outstanding checks

A system of internal control

The principle of establishing responsibility does not include

Trudy, Inc. had the following bank reconciliation at March 31, 2018: All reconciling items at March 31, 2018 cleared the bank in April. Outstanding checks at April 30, 2018 totaled $6,000. There were no deposits in transit at April 30, 2018. What is the cash balance per books at April 30, 2018?