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Exam 7: Sarbanes-Oxley,internal Control,and Cash

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Question 1

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Jackson Industries has collected the following information but needs assistance completing the table.The cash payments were 90% of collections. $\begin{array}{|c|l|}\hline \text { Cash } & \\\hline ? ? & \text { Beg. balance } \\\hline \$ 511,770 & \text { Collections } \\\hline ? ? & \text { Payments } \\\hline \$ 102,275 & \text { End balance } \\\hline\end{array}$ How much was the beginning balance of the cash account?

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Calculations:
$511,770 × 90% =...

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Question 2

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On April 3,Snappy Sales decides to establish a $135.00 petty cash fund to relieve the burden on Accounting. a Journalize the establishment of the fund. b On April 11,the petty cash fund has receipts for mail and postage of $32.75,contributions and donations of $25.25,meals and entertainment of $68.00,and $9.75 in cash.Journalize the replenishment of the fund. c On April 12,Snappy Sales decides to increase petty cash to $175.00.Journalize this transaction.

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Question 3

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Money market accounts,commercial paper,and U.S.Treasury bills are examples of cash equivalents.

A backlog in recording transactions is an example of a warning sign from the accounting system.

Minor Company had checks outstanding totaling $19,200 on its April bank reconciliation.In May,Minor Company issued checks totaling $64,900.The May bank statement shows that $47,600 in checks cleared the bank in May.A check from one of Minor Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Minor Company's May bank reconciliation should be

The main reason that the bank statement cash balance and the company's cash balance do not initially balance is due to timing differences.

What entry is required in the company's accounts to record outstanding checks?

A check for $342 was erroneously charged by the bank as $432.In order for the bank reconciliation to balance,you must add $90 to the bank statement balance.

Which of the following would be added to the balance per books on a bank reconciliation?

The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges.

Stephanie Jo Company established a petty cash fund of $300 on May 1.At the end of the month,the petty cash fund has $42 in cash and receipts for postage,$39; entertainment,$146; and office supplies of $70. Prepare the needed journal entries,recording any discrepancy in the cash short and over account. $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Journal }$ $\begin{array}{|l|c|r|r|r|}\hline \text { Date } & {\text { Description }} & \begin{array}{r}\text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \\\hline \\\hline & & & & \\\hline \\\hline \\\hline \\\hline \\\hline \\\hline\end{array}$

A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called an

If the balance in Cash Short and Over at the end of a period is a credit,it indicates that cash shortages have exceeded cash overages for the period.

Consider the following information from the cash account.Assume cash payments were 84% of collections. $\begin{array}{|c|l|}\hline \text { Cash } & \\\hline ? ? & \text { Beg. balance } \\\hline \$ 245,000 & \text { Collections } \\\hline ? ? & \text { Disbursements } \\\hline \$ 80,275 & \text { End balance } \\\hline\end{array}$ How much was the beginning balance of the cash account?

The actual cash received during the week ended June 7 for cash sales was $18,632,and the amount indicated by the cash register total was $18,628.Journalize the entry to record the cash receipts and cash sales. $\begin{array}{|c|c|c|c|r|}\hline \text { Date } & {\text { Description }} & \begin{array}{c}\text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \\\hline &\\\hline & \\\hline\end{array}$

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the petty cash account.

The following data were gathered to use in reconciling the bank account of Savannah Company: $\begin{array}{|l|r|}\hline \text { Balance per bank } & \$ 16,750 \\\hline \text { Balance per company records } & 16,125 \\\hline \text { Bank service charges } & 80 \\\hline \text { Deposit in transit } & 2,195 \\\hline \text { NSF check } & 950 \\\hline \text { Outstanding checks } & 3,850\\\hline\end{array}$ What is the adjusted balance on the bank reconciliation?

A $150 petty cash fund has cash of $54 and receipts of $83.The journal entry to replenish the account would include a

The actual cash received during the week ended October 31 for cash sales was $23,447 and the amount indicated by the cash register total was $23,457 . Journalize the entry to record the cash receipts and cash sales. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Journal }$ $\begin{array}{|r|c|c|c|r|}\hline \text { Date } &{\text { Description }} & \begin{array}{c}\text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline \\\hline &\\\hline & \\\hline\end{array}$