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

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Question 71

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The actual cash received during the week ended October 31 for cash sales was $23,447.00 and the amount indicated by the cash register total was $23,457.00. Journalize the entry to record the cash receipts and cash sales. Journal

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Question 72

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On April 2nd, Granger Sales decides to establish a $125.00 Petty Cash Account to relieve the burden on Accounting. (a) Journalize this event. (b) On April 10th, the petty cash fund has receipts for mail and postage of $43.50, contributions and donations of $29.50, meals and entertainment of $38.25 and $13.55 in cash. Journalize the replenishment of the fund. (c) On April 11th, Granger Sales decides to increase petty cash to $200.00. Journalize this event.

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Question 73

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Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n)

Present entries to record the following transactions:

Entries are made to the Petty Cash account when

A firm's internal control environment is not influenced by

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

In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Jamison Company developed the following reconciling information in preparing its June bank reconciliation: $\begin{array}{ll}\$ 13,000 & \text { Cash balance per bank, } 6 / 30 \\4,000 & \text { Note receivable collected by bank } \\7,000 & \text { Outstanding checks } \\2,500 & \text { Deposits-in-transit } \\35 & \text { Bank service charge } \\1,900 & \text { NSF check }\end{array}$ Using the above information, determine the cash balance per books (before adjustments) for the Jamison Company.

A customer's check received in settlement of an account receivable is considered cash.

A business that requires all cash payments be made by check can use a petty cash system.

Credit memos from the bank

Which of the following would be subtracted from the balance per books on a bank reconciliation?

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

A $150 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

Peaches, Inc. reported the following date in it's December 31, 2011 annual report: Required: (1) What is the company's "cash burn" per month? (2) What is the company's ratio of cash to monthly cash expenses?

Receipts from cash sales of $7,500 were recorded incorrectly in the cash receipts journal as $5,700. This item would be included on the bank reconciliation as a(n)