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Exam 7: Fraud, Internal Control, and Cash

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Question 21

Multiple Choice

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Postage stamps on hand are considered to be

A) cash.
B) petty cash.
C) cash equivalents.
D) a prepaid expense.

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

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Question 22

Multiple Choice

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Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,550; deposits in transit $2,500; NSF check $160; bank service charge $50; cash balance per books $8,800. As a result of this reconciliation, Carothers will

A) reduce its cash account by $50.
B) reduce its cash account by $210.
C) reduce its cash account by $950.
D) increase its cash account by $110.

E) A) and B)
F) None of the above

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Question 23

Multiple Choice

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In the month of November, Kinsey Company Inc. wrote checks in the amount of $27,750. In December, checks in the amount of $37,974 were written. In November, $25,404 of these checks were presented to the bank for payment, and $32,649 were presented in December. What is the amount of outstanding checks at the end of December?

IFRS, compared to GAAP, tends to be more

A company stamps checks received in the mail with the words "For Deposit Only". This endorsement is called a(n)

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

Candy Claws Company gathered the following reconciling information in preparing its August bank reconciliation: The adjusted cash balance per books on August 31 is

Tangible frauds include

Bank errors

GAAP, compared to IFRS, tends to be more

The most important element of the fraud triangle is

Trudy, Inc. had the following bank reconciliation at March 31, 2015: All reconciling items at March 31, 2015 cleared the bank in April. Outstanding checks at April 30, 2015 totaled $6,000. There were no deposits in transit at April 30, 2015. What is the cash balance per books at April 30, 2015?

Physical controls to safeguard assets do not include

An employee authorized to sign checks should not record

Jukebox Company had checks outstanding totaling $10,800 on its June bank reconciliation. In July, Jukebox Company issued checks totaling $77,800. The July bank statement shows that $76,600 in checks cleared the bank in July. A check from one of Jukebox Company's customers in the amount of $1,000 was also returned marked "NSF." The amount of outstanding checks on Jukebox Company's July bank reconciliation should be

Storing cash in a company safe is an application of which internal control principle?

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash with maturities of

A $100 petty cash fund has cash of $17 and receipts of $86. The journal entry to replenish the account would include a

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?