AC 210 Chapter 5 Learnsmart
bank
deposits in transit are added to the ___________ side of the bank reconciliation
corruption, asset misappropriation, financial statement fraud
employee fraud is often grouped into these 3 categories:
purchase order
ensures the order is placed with an approved supplier at approved prices
purchase requisition
ensures the request is made by someone who is approved to order goods or services of the type and amount requested
nothing
if a bank reconciliation included a deposit in transit of $670, the company's journal entry for this reconciling item would include _____________
cash shortage is debited
if the cash collected is less than the amount per the cash register, then ________________________________
added to the book balance
in a bank reconciliation, interest revenue earned on the bank account balance is ______________
supplier invoice
is used to ensure that the appropriate amount is paid for goods received
receiving report
is used to verify amounts ordered agree with the suppliers actual shipments
operations
objective is to ensure the efficient and effective completion of work and the protection of assets
compliance
objective is to focus on adhering to laws and regulations
reporting
objective is to produce reliable and timely accounting information
restricting access
physically locking up assets and electronically securing access to other assets and information is required by the internal control principle of __________________
control environment
refers to helping people in the organization to understand the importance of internal control
risk assessment
refers to the continuous evaluation of the potential for fraid
information and communication
refers to the documentation of actions that provide effective internal controls
monitoring activities
refers to the evaluation of internal controls to determine if they are working as intended
control activities
refers to the work responsibilities and duties completed to reduce risks to an acceptable level
opportunity
____________ is one of the 3 components of the fraud triangle that relates to taking advantage of weak internal controls
voucher
a _____________ system is a process for approving and documenting all purchases and payments made on account
deduction from the book balance
a bank service charge should be a _______________________________________________ on a bank reconciliationim
debit
a bank will show a customer's withdrawal as a _________
liability
a deposit is a _____________ from the bank's point of view
not held at the bank
a difference between an imprest payroll account and petty cash is, petty cash is _________________
imprest
an ____________ system controls the amount paid to others by limiting the total amount of money available for making payments
segregate duties
cashiers at a supermarket have to talk to a manager before approving price changes at the register. Which internal control principle is being followed?
outstanding
checks that have been written but have not yet cleared the bank
reconciling
comparing two sets of records is called ___________
incentive, opportunity, and rationalization
the 3 components of the fraud triangle are:
deduction from the bank balance
the bank credited your account for a deposit that should have been deposited into another customer's bank account, not yours. This bank error should be a __________________________________ on a bank reconciliation
credit
the bank will show a customers deposit on bank statements as a ________________
credit cash, debit petty cash
the entry to record putting money into a petty cash fund includes what _______________, ________________
expense accounts, cash
the entry to record the replenishment of the petty cash fun involves debiting __________________, and crediting _________________
purchase requisition
the purchasing system begins with an authorized employee completing a manual or electronic _____________________ which is then reviewed and approved by a supervisor before an order is placed with a supplier
receiving report
this document indicates the date, quantity, and condition of the goods. it is then sent to the accounting department to notify the purchase can be recorded
deducted from the bank balance
this months bank statement shows that the bank incorrectly credited ABC company's account for a $100 deposit that should have been credited to XYZ company;'s account. How would this item be treated on ABC's bank reconciliation?
true
true or false: committing financial fraud can result in stiff penalties, including fines and jail sentences
SOX Act
what act aims to reduce fraud by: -reducing opportunities -counteract incentives -encourage honesty in employees
outstanding checks
what is subtracted from the bank balance on a bank reconciliation?
petty cash
what is used to avoid the time and cost of writing checks for business expenses that are small amounts and is controlled by limiting the amount in it and subjecting it to surprise audits
needs to be replenished
when are petty cash payments recorded in the accounting systems ledger?