acct - CHAPTER 5 hw + SB

Restricted cash is reported separately as

an asset on the balance sheet

5 common principles of internal control - know

1. establish responsibility 2. segregate duties 3. restrict access 4. document procedures 5. independently verify

3 ways banks help businesses control cash

1. restricting access to cash 2. documenting procedures 3. independently verifying

A(n) ______ is a collection of documents prepared in the process of approving, processing and documenting all purchases and payment made on account.

voucher

On a bank reconciliation, which of the following are typical reconciling items the bank would not know about because of time lags?

Deposits in transit, outstanding checks

Which of the following are typical reconciling items on the BOOK SIDE of a reconciliation because the company DID NOT KNOW about these items until it got the bank statement?

Interest income, Electronic funds transfers, Services charges

internal report prepared to compare the company's cash records with the bank statement

bank reconciliation

Banks provide important controls surrounding a company's cash. These include which of the following? banks provide :

banks provide documentation, provide statements that are used for independent verification, and banks restrict access

When a check is presented to a bank for payment and the amount is deducted from the payer's account, the check is said to have _______ the bank

cleared

which objective of an internal control system: Objective is to focus on adhering to laws and regulations

compliance

significant objectives of the SOX act (3)

encourage good character, reduce opportunities for fraud 3. counteract incentives for fraud

Investments within 3 months to maturity and Money market funds are cash ______

equilivants

Cash ______ are short-term, highly ______ investments purchased within ______ of maturity.

equivalents; liquid; 3 months

A check that you have written has cleared the bank when ______.

funds have been withdrawn from your bank account to cover the check

The Sarbanes-Oxley (SOX) Act provides increased regulations for ______. (3)

internal controls, corporate execuatives, and auditors

which objective of an internal control system: Objective is to ensure the efficient and effective completion of work and the protection of assets

operations

each objective of an internal control system

operations, reporting, compliance

a ______cash system involves 1. putting money into petty cash to make a fund 2. paying money out to reimburse others 3. putting money back into to replenish the fund.

petty

Comparing two sets of records is called ______.

reconciling

which objective of an internal control system: Objective is to produce reliable and timely accounting information

reporting