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Exam 4: Cash and Internal Controls

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Question 21

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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. -____ Overall attitude of the company with respect to internal controls.

A) Monitoring
B) Oversight board
C) Control activities
D) Corporate executive accountability
E) Nonaudit services
F) Control environment
G) Internal control
H) Information and communication
I) Auditor rotation
J) Risk assessment

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Question 22

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Discuss the events leading up to the passage of the Sarbanes-Oxley Act and its major provisions.

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Two of the highest-profile cases (Enron ...

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Question 23

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Which of the following is NOT a reason why a bank reconciliation is necessary?

Payment of dividends to stockholders is considered a(n) :

Which of the following would NOT represent good controls over cash disbursements?

Differences in the company's cash balance and the bank's cash balance occur because of either timing differences or errors.

A company's Cash account shows a balance of $5,680 at the end of the month.Comparing the company's Cash account with the monthly bank statement reveals several additional cash transactions such as deposits outstanding ($1,250),checks outstanding ($2,380),bank service fees ($40),an NSF check from a customer ($150),a customer's note receivable collected by the bank ($500),and interest earned ($60).Prepare the necessary entries to adjust the balance of cash.

The amount of cash reported in a company's balance sheet includes items acceptable for deposit in bank accounts,such as checks received from customers.

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. -____ Procedures for maintaining separation of duties.

The amount of cash reported in a company's balance sheet includes the balance of accounts receivable if cash collection is highly likely in the near future.

Cash transactions recorded by the bank but not yet recorded by the company include all of the following except

An example of separation of duties would be not allowing an employee who receives cash to also be responsible for depositing that cash in the bank account.

A company's Cash account shows a balance of $3,450 at the end of the month.Comparing the company's Cash account with the monthly bank statement reveals several additional cash transactions such as bank service fees ($50),an NSF check from a customer ($300),a customer's note receivable collected by the bank ($1,000),and interest earned ($100).Prepare the necessary entries to adjust the balance of cash.

Separation of duties refers to:

The statement of cash flows reports cash flows from the activities of:

On May 31,Money Corporation's Cash account showed a balance of $10,000 before the bank reconciliation was prepared.After examining the May bank statement and items included with it,the company's accountant found the following items: Error: Money Corp.wrote a check for $30 but recorded it incorrectly for $300. What is the amount of cash that should be reported in the company's balance sheet as of May 31?

Earnings quality is the ability of net income to report the true underlying performance of the company.

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. -____ Transfer of data from lower managers to top executives for accurate financial reporting.

Recording all cash receipts as soon as possible is considered a good internal control.

Which of the following is correct with respect to a bank reconciliation?