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Exam 4: Cash and Internal Controls

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Question 61

True/False

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A bank reconciliation matches the balance of cash in the bank account with the balance of cash in the company's own records.

A) True
B) False

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Question 62

Multiple Choice

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Which of the following would not be considered good internal control for cash receipts?

A) Allowing customers to pay with a debit card.
B) Requiring the employee receiving cash from customers to also deposit the cash into the company's bank account.
C) Recording cash receipts as soon as they are recorded.
D) Allowing customers to pay with a credit card.

E) A) and B)
F) A) and C)

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Question 63

Multiple Choice

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The following information was taken from the bank reconciliation for Mooner Sooner Inc.at the end of the year: Bank balance: $8,000 Checks outstanding: $5,800 Note collected by the bank: $1,500 Service fee: $20 Deposits outstanding: $4,000 NSF check (bad check) returned for $300 What is the correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of the year?

Whether a customer uses cash,a check,or a debit card to make a purchase,the company records the transaction as a cash sale.

Keeping supplies in a locked room with access allowed only to authorized personnel is an example of which preventive control?

Cash flows from investing do not include cash flows from:

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. -____ Sell office building.

Cash is typically reported as a current asset in the balance sheet.

McGregor Company allows customers to pay with credit cards.The credit card company charges McGregor 3% of the sale.When a customer uses a credit card to pay McGregor $200 for services provided,McGregor would:

When a company pays for services received using a credit card,it should credit Accounts Payable.

When preparing a bank reconciliation,a deposit outstanding would be:

The Sarbanes-Oxley Act (SOX) mandates which of the following?

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 to the company that are returned by the bank as not having adequate funds.

Terastar Corp.reports the following amounts for 2015 and 2016. What is the trend in free cash flows relative to net income?

Effective internal controls ensure a company's success and survival.

What is the link between the balance sheet and the statement of cash flows? Describe the operating,investing,and financing sections of the statement of cash flows.

The balance shown in the August bank statement of Colt Company was $23,200.After examining the August bank statement and items included with it,the company's accountant found: What is the amount of cash that should be reported in the balance sheet as of August 31?

Companies should set maximum purchase limits on debit cards and credit cards as part of internal controls.

Investing cash flows would include which of the following?

Which employees are the ones who must take final responsibility for the establishment and success of internal controls?