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Exam 6: Cash and Internal Controls

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Question 91

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A sales system with prenumbered,controlled sales slips is an example of the internal control principle of _______________________.

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maintain a...

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Question 92

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Describe the banking activities that promote the control of cash and identify the internal control objectives served by the banking activities.

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Banking activities can be organized into...

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Question 93

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An employee is __________ when a company purchases an insurance policy against losses from theft by that employee.

What is the purpose of the petty cash account?

Having external auditors test the company's financial records and evaluate the effectiveness of the internal control system is part of the internal control principle of ________________________.

Discuss how the principles of internal control apply to cash receipts.

A company established a petty cash fund of $100 on September 1.On September 10,the petty cash fund was replenished when there was $16 remaining and there were petty cash receipts for: office supplies,$27; courier,$32; and postage,$22.On September 15,the petty cash fund was increased to $125 in total.Record the above transactions in general journal form.

A purchase requisition is a document the purchasing department sends to the vendor to place an order.

The days' sales uncollected ratio is used to:

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding checks,deposits,and bank service charges.

A company had $12,000 in accounts receivable and $320,000 in net sales for the current period.Its days' sales uncollected is equal to 13.7 days.

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

A petty cash fund was originally established with a check for $150.In the petty cash fund on December 31 (the period-end),you find the following: $\begin{array} { | l | l | r | } \hline \text { Petty cash receipts } & \text { Postage } & \$ 43.50 \\\hline & \text { Office supplies } & 51.85 \\\hline & \text { Office equipment repair } & 49.00 \\\hline { \text { Cash } } && 4.25 \\\hline\end{array}$ Prepare the general journal entry to record the replenishment of the petty cash fund on December 31.

The document,also known as the check authorization,that is a checklist of steps necessary for approving an invoice for approval and payments is the:

Basic bank services such as bank accounts,bank deposits,and checking contribute to the control and safeguarding of cash.

Which of the following statements best describes how GAAP and IFRS treat cash?

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

The document that is an itemized statement of goods prepared by a vendor listing the customer's name,items sold,sales prices,and terms of the sale is the:

The internal document that is used to notify the appropriate person that ordered goods have been received and to describe the quantities and condition of the goods is the____________________.

The number of days' sales uncollected is calculated by: