Accounting Chapter 4

¡Supera tus tareas y exámenes ahora con Quizwiz!

A bank reconciliation is a procedure used to determine if the cash balance in the bank statements equals

The ending balance of cash balance in the accounting records

fraud

A deliberate deception intended to secure an unfair or unlawful gain.

The asset most susceptible to fraudulent activity is

Cash

Which of the following items are included in cash?

Checks, Currency, Coins, and Balance in checking accounts.

When adjusting the company's cash account balance in a bank reconciliation, which item must be added to the cash account balance?

Collection of funds by the bank.

In bank reconciliation, an outstanding check is

Deducted from the bank balance

cash receipts that have been recorded in the company's accounting records but are not yet recorded by the bank are

Deposits outstanding

Monitoring

Includes formal procedures for reporting control deficiencies

A company's plans to safeguard company assets and enhance the reliability and accuracy of accounting information are referred to as

Internal controls

Bank statement show interest earned of $45 how would this item be treated on the bank reconciliation?

It would be added to the company balance.

Internal control consist of plans to

Provide accurate and reliable accounting information, and safeguard company assets.

The three elements present in the fraud triangle are

Rationalization, motive, and opportunity.

What is the primary purpose of a bank reconciliation?

To ensure the bank balance per reconciliation is equal to the company balance per reconciliation.

The three elements present in every fraud are commonly referred to as the fraud

Triangle

In bank reconciliation, a deposit outstanding is

added to the bank balance

Control Environment

formal policies related to management's philosophy, assignment of responsibilities, and organizational structure

risk assessment

identifies and analyzes internal and external risk factors that could prevent a company's objectives from being achieved

Control Activities

policies, procedures, and rules that provide reasonable assurance that control objectives are met and risk responses are carried out

Joyce Inc sells $5,000 of goods to a customer. The customer pays with a visa credit card. Visa charges a 3% fee on the sale.

Credit Sales $5,000, Debit Cash $4,850, DSFE $150

A small amount of cash on hand to pay for minor purchases is commonly referred to as a

Petty cash fund

Which of the following are preventive controls?

Physical controls, and Separation of duties.

Who is responsible for providing an option on managements assessment of internal control?

The company's auditors

Who must personally certify the financial statements and company disclosures or risk financial penalties and criminal prosecution for fraudulent misstatements?

corporate executives

In a bank reconciliation, which of the following will require a journal entry by the company?

Adjustments to the balance per books for items discovered on the bank reconciliation that were not yet recorded on the books

The Sarbanes-Oxley Act applies to

Companies that are required to file with the SEC

Which of the following are components of internal control?

Control Environment, Control Activities, and Monitoring.

What requirement for corporate accountability are included in the Sarbanes-Oxley Act

Corporate executives must personally certify the financial statements and may be criminally liable for fraudulent financial statements.

Separation of Duties requires that

Individuals who have physical responsibilities for assets should not have access to accounting records.

Who has final responsibilities for internal controls

Management

The element of fraud easiest for companies to eliminate is

Opportunity

Preparation of a bank helps maintain control of cash account

Reconciliation

The Public Company Accounting Reform and Investor Protection Act of 2002 is known as the

Sarbanes-Oxley Act

When adjusting the company's cash account balance in a bank reconciliation, which items reduce the company's cash account balance?

Service charges, and charges for NSF checks

Which of the following is an example of separation of duties in a good system of internal controls.

The individual who receives the inventory does not have access to the accounting records.

A bank statement may not agree with the amount of cash recorded by the company in the cash amount because of

Timing differences and errors.


Conjuntos de estudio relacionados

SS Ch. 4 Nile River Valley. Lessons 1, 2, and 3 The Gift of the Nile 6th gr. Lake Castle

View Set

ACC 202 Exam 4 (Final chs 16-17)

View Set