Question Details

CHAPTER 8 FRAUD, INTERNAL CONTROL, AND CASH

COMPUTER S 230 CHAPTER 8 PART 10

BRIEF EXERCISES

BE 168
Match the principle of internal control to each of the following cases.

a)	Establishment of responsibility
b)	Segregation of duties
c)	Accountability for assets
d)	Documentation procedures
e)	Physical controls

	1.	Cash is locked in a safe overnight.
	2.	Employees who receive shipments of goods do not have access to the accounting records for merchandise.
	3.	Shipping documents are prenumbered.
	4.	The bookkeeper does not have physical custody of assets.
	5.	Only the treasurer of the company can sign checks.

BE 169
Identify which principle of internal control is being followed in each of the following cases.
1.	Warehouse employees do not have access to the accounting records.
2.	Prenumbered shipping documents are prepared for each shipment of goods.
3.	The locked warehouse is accessible only by warehouse employees with keys.

BE 170
Identify the internal control procedures applicable to cash receipts for Ferguson Company in each of the following cases.
1.	All cashiers are bonded.
2.	The treasurer compares the total cash receipts to the bank deposit daily.
3.	The bookkeeper records cash receipts which are held by the treasurer.
4.	Only the treasurer holds cash receipts.
5.	Deposit slips are completed for each deposit.


BE 171
Identify the internal control procedures applicable to cash disbursements followed by Downey Company in each of the following cases.
1.	Company checks are prenumbered.
2.	Only the treasurer is authorized to sign checks.
3.	All employees are required to take vacations.
4.	Blank checks are stored in a locked safe.
5.	The bookkeeper, not the treasurer, records cash disbursements.


BE 172
On October 1, Head and Heart Company- petty cash fund of $150 is replenished. The fund contains cash of $30, and receipts for supplies of $75 and postage of $45. Prepare the journal entry to record the replenishment of the petty cash fund.


BE 173
Identify whether each of the following items would be (a) added to the book balance, or (b) deducted from the book balance in a bank reconciliation.
1.	EFT transfer to a supplier
2.	Bank service charge
3.	Check printing charge
4.	Error recording check # 214 which was written for $450 but recorded for $540
5.	Collection of note and interest by bank on company- behalf


BE 174
Identify whether each of the following items would be (a) added to the book balance, (b) deducted from the book balance in a bank reconciliation, (c) added to the bank balance, or (d) deducted from the bank balance.
1.	Deposits in transit
2.	Bank service charge
3.	Collection of note and interest by bank on company- behalf
4.	NSF check
5.	Outstanding checks


BE 175
Identify which of the following reconciling items would require an adjusting entry to be made by Danielle Doyle Company.
1.	Deposits in transit totaled $2,000.
2.	A check written to the company for $415 by Cartography Company was returned NSF.
3.	The bank charged the company $25 for printing checks.
4.	Outstanding checks totaled $3,300
5.	A debit memorandum reported an EFT of $178 to Salome Utilities



BE 176
Harnish Company needs to make adjusting entries for each of the following reconciling items.  Identify the account to be debited and the account to be credited in each case.
1.	A check for $127 written to the company by J. Chandler was returned NSF.
2.	The monthly service charge by the bank was $20.
3.	The bank collected a $1,000 note plus interest of $100 on the company- behalf. The company had not accrued the interest.


BE 177
The following reconciling items are applicable to the bank reconciliation for the Spahn Company. Indicate how each item should be shown on a bank reconciliation.

a.	Outstanding checks.
b.	Bank credit memorandum for collecting a note for the depositor.
c.	Bank debit memorandum for service charge.
d.	Deposit in transit.


BE 178
At August 31, Coffman Company has this bank information: cash balance per bank $6,450; outstanding checks $2,762; deposits in transit $1,700; and a bank service charge $20.  Determine the adjusted cash balance per bank at August 31, 2012.


BE 179
Given the following information, determine the adjusted cash balance per books from the following information:
a.	Balance per books as of June 30, $8,600.
b.	Outstanding checks, $820.
c.	NSF check returned with bank statement, $130.
d.	Deposit mailed the afternoon of June 30, $300.
e.	Check printing charges, $30.
f.	Interest earned on checking account, $12.