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

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Question 1

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Consider the following information from the cash account.Assume cash payments were 84% of collections. $\begin{array}{|c|l|}\hline \text { Cash } & \\\hline ? ? & \text { Beg. balance } \\\hline \$ 245,000 & \text { Collections } \\\hline ? ? & \text { Disbursements } \\\hline \$ 80,275 & \text { End balance } \\\hline\end{array}$ How much was the beginning balance of the cash account?

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$245,000 × 84% = $20...

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Question 2

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Money market accounts,commercial paper,and U.S.Treasury bills are examples of cash equivalents.

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B) False

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Question 3

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Stephanie Jo Company established a petty cash fund of $300 on May 1.At the end of the month,the petty cash fund has $42 in cash and receipts for postage,$39; entertainment,$146; and office supplies of $70. Prepare the needed journal entries,recording any discrepancy in the cash short and over account. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Journal }$ $\begin{array}{|l|c|r|r|r|}\hline \text { Date } & {\text { Description }} & \begin{array}{r}\text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \\\hline \\\hline & & & & \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline\end{array}$

The following data were gathered to use in reconciling the bank account of Savannah Company: $\begin{array}{|l|r|}\hline \text { Balance per bank } & \$ 16,750 \\\hline \text { Balance per company records } & 16,125 \\\hline \text { Bank service charges } & 80 \\\hline \text { Deposit in transit } & 2,195 \\\hline \text { NSF check } & 950 \\\hline \text { Outstanding checks } & 3,850\\\hline\end{array}$ What is the adjusted balance on the bank reconciliation?

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the petty cash account.

The actual cash received during the week ended October 31 for cash sales was $23,447 and the amount indicated by the cash register total was $23,457 . Journalize the entry to record the cash receipts and cash sales. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Journal }$ $\begin{array}{|r|c|c|c|r|}\hline \text { Date } &{\text { Description }} & \begin{array}{c}\text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \\\hline &\\\hline & \\\hline\end{array}$

Minor Company had checks outstanding totaling $19,200 on its April bank reconciliation.In May,Minor Company issued checks totaling $64,900.The May bank statement shows that $47,600 in checks cleared the bank in May.A check from one of Minor Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Minor Company's May bank reconciliation should be

The actual cash received during the week ended June 7 for cash sales was $18,632,and the amount indicated by the cash register total was $18,628.Journalize the entry to record the cash receipts and cash sales. $\begin{array}{|c|c|c|c|r|}\hline \text { Date } & {\text { Description }} & \begin{array}{c}\text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \\\hline &\\\hline & \\\hline\end{array}$

A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.

The main reason that the bank statement cash balance and the company's cash balance do not initially balance is due to timing differences.

A backlog in recording transactions is an example of a warning sign from the accounting system.

What entry is required in the company's accounts to record outstanding checks?

A $150 petty cash fund has cash of $54 and receipts of $83.The journal entry to replenish the account would include a

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called an

Jackson Industries has collected the following information but needs assistance completing the table.The cash payments were 90% of collections. $\begin{array}{|c|l|}\hline \text { Cash } & \\\hline ? ? & \text { Beg. balance } \\\hline \$ 511,770 & \text { Collections } \\\hline ? ? & \text { Payments } \\\hline \$ 102,275 & \text { End balance } \\\hline\end{array}$ How much was the beginning balance of the cash account?

The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges.

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.

On April 3,Snappy Sales decides to establish a $135.00 petty cash fund to relieve the burden on Accounting. a Journalize the establishment of the fund. b On April 11,the petty cash fund has receipts for mail and postage of $32.75,contributions and donations of $25.25,meals and entertainment of $68.00,and $9.75 in cash.Journalize the replenishment of the fund. c On April 12,Snappy Sales decides to increase petty cash to $175.00.Journalize this transaction.

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

If the balance in Cash Short and Over at the end of a period is a credit,it indicates that cash shortages have exceeded cash overages for the period.