Chapter 6 Smartbook

Match the banking term on the left with the definition on the right

Deposit ticket - lists currency, coins, and checks deposited into an account. Check - a document signed by the depositor instructing the back to pay a specificamount of moneyc. Bank account - a record set up by a bank for a customerd.Remittance advice - explains the reason for paymente .Electronic funder transfer - electronic transfer of cash from one party to another

Determine which of the items below would show up on a monthly bank statement. (Check all that apply.)

Deposits and other increases to the account during the period Beginning-of-period balance in the account Withdrawals and other decreases to the account during the period End-of-period balance in the account

Determine which of the items below would appear in the Deposits column of a bank statement and would cause an increase in the account's balance. (Check all that apply.)

Deposits made during the month A note collected by the bank on behalf of the account owner Interest paid by the bank on the bank account balance

Identify the factors that cause the bank statement balance to differ from the depositor's book balance by matching each it its definition on the right.

Outstanding check-A check written by the depositor that has not yet been received by the bank for payment Deposit in transit-Deposit made and recorded by the depositor, but not yet recorded on the bank statement NSF check- check written by a customer who does not have enough money in his account to cover the check Bank charges-Service fees charged by the bank

Determine which of the statements below is true regarding the adjusted bank balance and the adjusted book balance on a bank reconciliation.

The adjusted bank balance must equal the adjusted cash balance per books.

Determine the statements below that are true regarding why a bank reconciliation is used. (Check all that apply.)

We must reconcile the balance of the bank's records and the Cash account in the general ledger and explain or account for any differences in the two. The bank reconciliation is useful in proving the accuracy of the Cash account in the general ledger. Timing differences between the bank statement and the depositor's records are reflected in the bank reconciliation

A good internal control to protect cash is to make cash payments using

checks

The following annual account balances are taken from ABC Co at year end.2015Accounts Receivable $49,500Net Sales - 580,000Days Sales Uncollected - 31.15 days2014Accounts Receivable $48,000Net Sales - 535,000Days Sales Uncollected - 32.74 days

(All except ABC Co. has increased the amount of time it takes to collect receivables from customers.)

Select the items below that would cause the bank statement balance to differ from the depositor's book balance.

NSF check, Deposit in transit, interest paid by bank

Identify which of the items below are goals of good cash management. (Check all that apply.)

Plan cash receipts to meet cash payments when due. Keep a minimum level of cash necessary to operate.

Determine which of the statements below accurately describe services provided by a bank. (Check all that apply.)

A bank account is a record set up by a bank for a customer. Each bank deposit is supported by a deposit ticket. To withdraw money from an account, the depositor can use a check.

A bank reconciliation is a ( n )(blank) explaining any checking (blank ) account balance differences between the according to the depositor's records and the balance reported on the bank ( blank ) statement

Blank 1: report Blank 2: checking Blank 3: bank

Review the items below and determine which would cause an increase in the monthly bank statement balance.

Cash deposits made by the account owner

Identify the basic internal control guidelines which should be in place to protect a business's cash by selecting the correct answers below. (Check all that apply.)

Cash receipts are promptly deposited in a bank. Cash payments are made by check. Handling cash is separate from recordkeeping of cash.

The cash in a cash register equaled $100, but the record of cash receipts/sales equaled $102. Determine which of the following entries is correct to record cash sales and the shortage.

Debit Cash $100; debit Cash Over and Short $2; and credit Sales $102.

Identify the principles of internal control by selecting the correct answers below. (Check all that apply.)

Insure assets. Establish responsibilities. Maintain adequate records. Apply technological controls. Separate recordkeeping from custody of assets. Perform regular and independent reviews.

Review the following statements and select the ones which accurately describe a Petty Cash fund. Select all answers which apply.

It is an asset reported on the balance sheet. It is established to pay for small payments like low-cost supplies and shipping fees, etc.

Identify the statement below that describes what the Days' sales uncollected ratio assesses.

It measures how quickly a company can convert its accounts receivables into cash.

cWhich of the statements below describe the goals and principles of cash management? (Check all that apply.)

Keep a minimum level of cash necessary to operate. Encourage quick collection of receivables. Plan cash receipts to meet cash payments when due. Money should be spent only when it is available.

Keep a minimum level of cash necessary to operate. Plan cash receipts to meet cash payments when due.

Keep a minimum level of cash necessary to operate. Plan cash receipts to meet cash payments when due.

Which statement below explains why liquid assets are needed in a business?

Liquid assets must be available to pay current liabilities.

Identify the principles of internal control by selecting the correct answers below. (Check all that apply.)

Protect assets Uphold company policies Promote efficient operations Ensure reliable accountinga

Which of the statements below explains how technology has impacted internal control systems? (Check all that apply.)

Technology has encouraged the growth of e-commerce, which means that there is a higher risk of credit card number theft. Technologically advanced systems can record who made entries, the date and time of the entry and the source of the entry. Technology has reduced the number of processing errors.

A cash register tape reflected total sales equaling $100, but the cash in the cash register drawer equaled $105. Review the statements below and determine which is correct regarding this discrepancy. (Check all that apply.)

The Sales account will be credited for $100. The extra $5 collected will be treated as a miscellaneous revenue. The Cash account will be debited for $105. The Cash Over and Short account will be credited for $5.

Determine which of the statements below is correct regarding information reflected on a monthly bank statement

The information on the bank statement reflects the bank's records of the depositor's account.

True or false: The adjusted book balance and the adjusted bank balance must equal each other on a bank reconciliation; otherwise, the cash account is not reconciled.

True

All of the following describe blockchain:

blockchain makes it more difficult for the ledger to be modified without a detailed record of changes blockchain is continuously and simultaneously updated and verified

Define what liquidity means by completing the following sentence. Liquidity refers to a company's ability to pay for its (blank) liabilities

current

Auditors focus more on testing the ____ of a company's blockchain processes and technology than on verifying the ___ of its output.

effectiveness/accuracy

Each of the following are types of technological impacts related to internal control:

reduced processing errors separation of duties more extensive testing of records new evidence of processing