ACCTG 211 Cash Review

Which of the following statements is true of the​ Sarbanes-Oxley Act?

• Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients.
• All private and foreign companies must issue an internal control report evaluated by an outside auditor.
• The Public Company Accounting Oversight Board oversees the work of auditors of public companies.
• Those who commit securities fraud must be sentenced to 10 years in prison.

Which of the following describes the risk assessment component of internal​ control?

• Risk assessment is the​ "tone at the​ top" of the business.
• Internal auditors monitor company controls to safeguard​ assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
• Risk assessment is designed to ensure that the​ business's goals are achieved.
• A company must identify its risks and take necessary steps to minimize them.

At Cadmia  Services, the cashier collects checks and cash from  customers, and the junior accountant records the transactions in the journal. The controller approves the journal entries and bank reconciliations. The treasurer signs checks and approves contracts.

Which internal control procedure is exemplified in the above  situation?

• separation of duties
• 
  ​competent, reliable, and ethical personnel
• assignment of responsibilities
• documents

Which of the following is included in the internal control procedure documents?

• A company should purchase a fireproof vault to protect legal documents.
• The invoices and orders must be​ pre-numbered.
• Separate the custody of assets from accounting.
• Mandatory vacations will improve internal control.

Which of the following would be included in the entry to record the replenishment of a petty cash​ fund?

• a credit to Cash
• a credit to Miscellaneous Expense
• a credit to Petty Cash
• a debit to Accounts Receivable

The bank recorded a​ $3,000 deposit as​ $300. How would this information be included on the bank​ reconciliation?

• an addition on the book side
• a deduction on the book side
• a deduction on the bank side
• an addition on the bank side

A check of​ $300,000, deposited by a​ company, was returned to the bank for nonsufficient funds. How would this information be included on the bank​ reconciliation?

• a deduction on the book side
• a deduction on the bank side
• an addition on the book side
• an addition on the bank side

Which of the following items are reconciling items on the bank side of the​ reconciliation?

• outstanding checks and correction of book error
• bank service charge and correction of book error
• deposit in transit and outstanding checks
• deposit in transit and NSF check