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Exam 4: Cash and Internal Controls

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Question 1

True/False

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One benefit of internal control is greater reliance by investors on reported financial statements.

A) True
B) False

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True

Question 2

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A company establishes a $300 petty cash fund on August 3 to pay for minor cash expenditures.The fund is replenished at the end of each month.At the end of August,the fund contains $40 in cash and the following receipts: Record the establishment of the petty cash fund on August 3,the expenditures of the fund,and replenishment on August 31.

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11eaa3e2_15ae_6afd_9f8f_3717a858117f_TB2393_00

Question 3

True/False

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The internal control component of information and communication relates to the effectiveness of accurately measuring and communicating business transactions.

Occupational fraud:

What is the purpose of the statement of cash flows? List the three major categories of cash flows and give an example of a cash transaction for each category.

Providing employees with appropriate guidance to ensure they have the knowledge necessary to carry out their job duties is an example of which preventive control?

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Checks written by the company but not yet recorded by the bank.

Indicate whether the firm should add or subtract each item below from its balance of cash or the bank's balance of cash in preparing a bank reconciliation.

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Purchase equipment.

A company's cash is reported in two financial statements - income statement and statement of cash flows.

Common examples of cash equivalents include all of the following except:

Section 404 of the Sarbanes-Oxley Act requires that a company's management document and assess the effectiveness of all internal control processes that could affect financial reporting.

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Issue common stock.

Below is a summary of all the transactions of Sampson Consulting for the month of April 2015. Prepare a statement of cash flows for the month of April,properly classifying each of the transactions into operating,investing,and financing activities.The cash balance at the beginning of April is $14,800.

A minor amount of cash kept on hand to pay for small purchases is referred to as a:

The following information pertains to Sooner Company's cash balance and bank reconciliation as of August 31: What is the correct cash balance for Sooner Company?

Which of the following is NOT a design feature of effective internal controls?

Which of the following does not represent a major provision of the Sarbanes-Oxley Act?

Providing services to customers on account is considered a(n) :

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Routine activities that are meant to continually observe internal control activities.