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Exam 7: Fraud, Internal Control, and Cash

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Question 61

Multiple Choice

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Petersen Company is preparing a cash budget for September.The company's cash balance on September 1 is $23,200.The company anticipates cash receipts of $111,800 and cash disbursements of $117,320.If Petersen desires a cash balance of $24,000, it must

A) acquire financing of $800.
B) acquire financing of $6,320.
C) acquire financing of $4,720.
D) acquire financing of $18,480.

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Question 62

Multiple Choice

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Russel Company assembled the following information in completing its March bank reconciliation: As a result of this reconciliation, Russel will

A) reduce its cash account by $2,375.
B) reduce its cash account by $125.
C) increase its cash account by $275.
D) reduce its cash account by $525.

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Question 63

Multiple Choice

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Which of the following is not a limitation of internal control?

In the month of November, Gavin Company Inc.wrote checks in the amount of $55,500.In December, checks in the amount of $75,948 were written.In November, $50,808 of these checks were presented to the bank for payment and $65,298 in December.What is the amount of outstanding checks at the end of December?

Schwinn Company assembled the following information in completing its March bank reconciliation: As a result of this reconciliation, Schwinn will

Of the following employees, who should prepare the bank reconciliation?

If a check correctly written and paid by the bank for $491 is incorrectly recorded on the company's books for $419, the appropriate treatment on the bank reconciliation would be to

The cash receipts section of a cash budget includes all of the following except

Which of the following is an example of a bank reconciliation item that requires an adjusting entry?

Internal auditors

Ferguson Company is preparing a cash budget for September.The company's cash balance on September 1 is $34,800.The company anticipates cash receipts of $167,700 and cash disbursements of $175,980.If Ferguson desires a cash balance of $36,000, it must

Cash equivalents do notinclude

In the month of November, Gavin Company Inc.wrote checks in the amount of $46,250.In December, checks in the amount of $63,290 were written.In November, $42,340 of these checks were presented to the bank for payment and $54,415 in December.What is the amount of outstanding checks at the end of December?

Which of the following is not an internal control activity for cash?

Before a check authorization is issued, the following documents must be in agreement, except for the

A check returned by the bank marked "NSF" means

Which of the following is not a basic principle of cash management?

The use of prenumbered checks is an example of

Dekin Company had checks outstanding totaling $34,000 on its May bank reconciliation.In June, Dekin Company issued checks totaling $212,800.The June bank statement shows that $158,400 in checks cleared the bank in June.A check from one of Dekin Company's customers in the amount of $1,600 was also returned marked "NSF." The amount of outstanding checks on Dekin Company's June bank reconciliation should be

A debit balance in Cash Over and Short is reported as a