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Exam 7: Sarbanes-Oxley, internal Control, and Cash

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Question 1

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Consider the cash account below. Additional Information: cash disbursements were 80% of collections. How much was the Beginning Balance of the Cash Account?

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Calculation:
$115,375 X 80% = Disburseme...

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Question 2

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Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

A) accounting controls
B) cash controls
C) preventive controls
D) detective controls

E) All of the above
F) A) and C)

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Question 3

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List and define each of the five elements of internal control.

For strong internal control system over cash,it is important to have the duties related to cash receipts and cash payments divided among different employees.

An element of internal control is

A payment system that uses computerized electronic impulses to effect a cash transaction is called electronic funds transfer (EFT).

Which of the following would be added to the balance per books on a bank reconciliation?

Roper Electronics received its bank statement for the month of August with an ending balance of $11,740.00.Roper determined that check #613 for $155.00 and check #601 for $420.00 were both outstanding.Also,a $6,900.00 deposit for August 30th was in transit as of the end of the month.Northern Regional Bank also collected a $5,000.00 notes receivable on August 1st that was issued March 1st at 12% annual interest.No interest revenue has been accrued on this note and Northern Regional Bank charged a $35.00 fee for the collection service.The bank statement reveals a bank service charge of $20.00.A customer check for $68.00 was returned with the bank statement marked "NSF".The ending balance of the Roper cash account is $12,938.00. Complete a bank/account reconciliation and prepare any necessary journal entries for the reconciliation.

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

A voucher system is an example of an internal control procedure over cash payments.

The control environment in an internal control structure is the attitude and awareness of internal control by all employees.

You began your new job as the accountant at Bolivar Industries during the month of December.During your first month,you found several interesting issues. 1)While looking through the invoices,you found Invoices 213-242,245-271,and 275-290.It appears that invoices 243,244,272,273,and 274 are missing. 2)During the month,Clerk # 3 issued $250 in refunds as compared to Clerks #1,#2,and #4 who issued less than $50 each. 3)The daily cash receipts and bank deposits reconcile,except on Tuesdays during the month. 4)Business is generally brisk during the holiday season,but two weeks before Christmas there was a sudden increase in slow payments. REQUIRED: Part A: What kind of warning signs could be associated with these issues? Part B: What control could you put in place regarding cash refunds mentioned in Part A (2)?

On August 3rd,Sonar Sales decides to establish a $275.00 Petty Cash Account to relieve the burden on Accounting.

A $140 petty cash fund has cash of $20 and receipts of $117.The journal entry to replenish the account would include a credit to

A $150 petty cash fund has cash of $44 and receipts of $93.The journal entry to replenish the account would include a

Using the following information,prepare a bank reconciliation for Cole Co.for May 31,2011:

Which of the following should not be considered cash by an accountant?

Journalize the entries to record the following: Journal

For efficiency of operations and better control over cash,a company should maintain only one bank account.

The actual cash received during the week ended June 7 for cash sales was $18,632.00,and the amount indicated by the cash register total was $18,628.00.Journalize the entry to record the cash receipts and cash sales. Journal