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

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Question 61

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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 62

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Cash equivalents include

A) checks
B) coins and currency
C) money market accounts and commercial paper
D) stocks and short-term bonds

E) B) and D)
F) C) and D)

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Question 63

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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.

Money market accounts, commercial paper, and United States Treasury Notes are examples of cash equivalents.

Consider the following journal entry made by Jones Company. Upon investigation, what might you find happened to create this amount of Cash Over/Short account difference? Give three possible reasons for this difference.

On April 3rd, Snappy Sales decides to establish a $135.00 Petty Cash Account to relieve the burden on Accounting. (a) Journalize this event. (b) On April 11th, 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 12th, Snappy Sales decides to increase petty cash to $175.00. Journalize this event.

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

The following data is from the Miser Company for years ended 2008-2011. $\begin{array}{l}\text { Year Ending December } 31 \text { Data }\\\begin{array} { | l | l | l | l | l | } \hline & 2008 & 2009 & 2010 & 2011 \\\hline \text { Cash \& Cash Equivalents } & 23,788 & 45,776 & 52,899 & 82,744 \\\hline \text { Cash Flow from Operations } & ( 32,556 ) & ( 47,880 ) & ( 32,357 ) & ( 16,450 ) \\\hline\end{array}\end{array}$ Calculate the following: $\begin{array}{l}\text { Year Ending December } 31 \text { Data }\\\begin{array} { | l | l | l | l | l | } \hline & 2008 & 2009 & 2010 & 2011 \\\hline \text { Monthly Cash Expenses } & & & & \\\hline \text { Ratio of Cash to Monthly Cash Expenses } & & & & \\\hline\end{array}\end{array}$

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

Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus prevent fraud and misleading financial statements.

Internal control is enhanced by separating the control of a transaction from the record-keeping function.

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

The Scharf Company is a retailer located in a state without sales tax. The following data was given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change. Record the Journal Entries for EACH cash register to determine the cashier's accuracy.

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

The following items may appear on a bank statement: Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account. Use the following format:

The objectives of internal control are to

All bank memos reported on the bank reconciliation require entries in the company's accounts.

The amount of cash to be reported on the balance sheet at June 30 is the

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

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