Accounting Review Chapter 8

Which of the following is NOT a component of internal control?

• Assignment of Duties

• Control Procedures

• Risk Assessments

• Information Stystems

Shady Mills Company Cash account shows an ending balance of $1,000. The bank statement shows an ending balance of $680. Additional information includes:

$30 Service Charge

$300 Deposit in Transit

$10 Interest earned on bank balance

What is the adjusted book balance?

• $980

• $680

• $440

• $1,280

The ___________ compares the bank deposit to the journal entry for the cash receipts to ensure that the bank deposit matches the accounting records for the Cash account.

• Cashier

• Treasurer

• Accounting Department (Bookkeeper)

• Controller

The following was paid out of the Petty Cash Account:

$400 for Store Supplies

$200 for Postage Expense

After counting the cash that is left in the Petty Cash, $560 is needed to replenish the Petty Cash back to the original balance.

The journal entry to record the replenishing of Petty Cash would be:

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Abbott Company completed the bank reconciliation and needs to record the $30 service charge from the bank.

The journal entry to record this transaction would be:

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The Sarbanes-Oxley Act requires companies to _____________.

• Have all documents maintained in an electronic format

• State policies for protecting E-Commerce Sales

• Conduct a review of internal controls and take responsibility for the accuracy and completeness of the financial reports.

• Divide responsibilities between two or more individuals

The following was paid out of the Petty Cash account:

$200 for Office Supplies

$100 for Delivery Expense

After counting the cash that was left in Petty Cash, $320 in needed to replenish the Petty Cash back to the original balance.

The journal entry to record the replenishment of Petty Cash would be:

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To increase the amount in the current Petty cash Fund from $1,000 to $1,200, the journal entry would be:

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For each Petty Cash payment, the custodian of the account prepares a(n) ___________________.

• Petty Cash Ticket

• Invoice

• Purchase Order

• Receipt

The following was paid out of the Petty Cash Account:

$200 for Office Supplies

$100 for Delivery Expense

$300 is needed to replenish the Petty Cash back to the original balance.

The journal entry to record the replenishment of Petty Cash would be:

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