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Exam 6: Cash,fraud,and Internal Controls

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Question 101

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The days' sales uncollected ratio measures a company's ability to manage its debt.

A) True
B) False

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Question 102

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When a voucher system is used,an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

A) True
B) False

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Question 103

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Havermill Co.establishes a $250 petty cash fund on September 1.On September 30,the fund is replenished.The accumulated receipts on that date represent $73 for Office Supplies,$137 for merchandise inventory,and $22 for miscellaneous expenses.The fund has a balance of $18.On October 1,the accountant determines that the fund should be increased by $50. -The journal entry to record the establishment of the fund on September 1 is:

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Assigning purchasing,receiving,and paying for merchandise to one department or individual is a way to streamline a voucher system.

Deposits made and recorded by the depositor but not yet recorded on the bank statement are called ________.

A sales system with pre-numbered,controlled sales slips is an example of the internal control principle of ________.

Cash registers,time clocks,and scanners are examples of technologies that can improve internal control.

Match the following terms with the appropriate definition.

A bank statement provided by the bank includes:

Norman Co.had $5,925 million in sales and $1,155 million in ending accounts receivable for the current period.For the same period,Opal Co.reported $5,885 million in sales and $790 million in ending accounts receivable.Calculate the days' sales uncollected for both companies as of the end of the current period and indicate which company is doing a better job in managing the collection of its receivables.

The Cash Over and Short account:

When a petty cash fund is in use:

Cash equivalents meet all of the following criteria except:

Havermill Co.establishes a $250 petty cash fund on September 1.On September 30,the fund is replenished.The accumulated receipts on that date represent $73 for Office Supplies,$137 for merchandise inventory,and $22 for miscellaneous expenses.The fund has a balance of $18.On October 1,the accountant determines that the fund should be increased by $50. -The journal entry to record the reimbursement of the fund on September 30 includes a:

Separation of duties involves dividing responsibility for a transaction or a series of related transactions between two or more individuals or departments.

The number of days' sales uncollected is calculated by:

If the Cash Over and Short account has a credit balance at the end of the period,the amount is commonly reported as miscellaneous revenue.

The clerk who has access to the cash in the cash register should also have access to the cash register tape or file.

Deposits in transit are deposits made and recorded by the depositor,but not yet recorded on the bank statement.