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Exam 4: Cash and Internal Controls

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Question 81

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A company's general ledger shows a cash balance of $4,570.Comparing the company's cash records with the monthly bank statement reveals several additional cash transactions such as checks outstanding of $2,840,bank service fees of $110,and interest earned of $15.Calculate the correct balance of cash.

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Question 82

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The balance in the Colt Company's Cash account on August 31 was $19,700,before the bank reconciliation was prepared.After examining the August bank statement and items included with it,the company's accountant found: What is the amount of cash that should be reported in the balance sheet as of August 31?

A) $20,700.
B) $17,200.
C) $18,700.
D) $22,200.

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

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Question 83

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A company's cash balance is reported in which two financial statements?

A company provides services on account during the current year totaling $400,000.By the end of the year,$350,000 of this amount had been received.In addition,$75,000 was received on account from customers for services provided in the prior year.Determine the amount of operating cash flows the company will report as received from customers in the current year.

In response to corporate accounting scandals and to public outrage over seemingly widespread unethical behavior of top executives,Congress passed the Sarbanes-Oxley Act.

Operating cash flows would exclude:

The control environment refers to the overall top-to-bottom attitude of the company with respect to internal controls.

Which element of the fraud triangle do companies have the greatest ability to eliminate?

When a company pays for services received using a check,it should credit Accounts Payable until the check is paid by the bank.

Issuing common stock for cash is considered a(n) :

Which of the following is NOT involved in the replenishment of the petty cash fund?

During the current year,a company purchases equipment for $250,000,paying $50,000 immediately and promising to pay the remainder within 30 days after the end of the year.Determine the amount of investing cash flows the company will report in the current year.

The Public Company Accounting Oversight Board (PCAOB)has the authority to establish standards dealing with auditing,quality control,ethics,independence,and other activities relating to the preparation of audited financial reports.

Generally,when a company's net income and free cash flows trend in the same direction over time,earnings are believed to have higher quality.

An NSF check is an example of a cash transaction that is initially recorded by the bank and later by the company after notification.

Opening mail and making a list of checks received once per week is considered a good internal control over cash receipts.

Terastar Corp.reports the following amounts for 2015 and 2016: What is the amount of Terastar's free cash flows for 2016?

Consider the following cash flow items: Pay amount owed to bank for previous borrowing. Pay utility costs. Purchase equipment to be used in operations. Purchase office supplies. Pay one year of rent in advance. Pay workers' salaries. Pay for research and development costs. Pay taxes to the IRS. Sell common stock to investors. How many of these cash flow items involve investing activities?

When customers pay for services with a debit card,the company should debit Cash and credit Service Revenue.

Listed below are five terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Withdraws funds directly from the user's account at the time of use.