Test bank accounting 25th editon warren chapter 8 sarbanes oxley, internal control, and cash

Chapter 8--Sarbanes-Oxley, Internal Control, and Cash
Student: ___________________________________________________________________________
1. The Sarbanes-Oxley Act of 2002 was passed by Congress due to the public outcry after the financial scandals
of the early 2000s.
True False

2. Sarbanes-Oxley’s purpose is to improve financial reporting.
True False

3. There are two internal control objectives and they are to ensure accurate financial reports, and ensure
compliance with applicable laws.
True False

4. Sarbanes-Oxley requires companies to maintain strong and effective internal controls and thus prevent fraud
and misleading financial statements.
True False

5. The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's
conclusions about the effectiveness of the company's internal control procedures.
True False

6. The control environment in an internal control structure is the attitude and awareness of internal control by all
employees.
True False

7. Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the
control procedure: separating operations, custody of assets, and accounting.
True False


8. Internal control is enhanced by separating the control of a transaction from the record-keeping function.

True False

9. A backlog in recording transactions is an example of a warning sign from the accounting system.
True False

10. Money orders are considered cash.
True False

11. A customer's check received in settlement of an account receivable is considered cash.
True False

12. Businesses who have several bank accounts, petty cash, and cash on hand, would maintain a separate ledger
account for each type of cash.
True False

13. For strong internal control system over cash, it is important to have the duties related to cash receipts and
cash payments divided among different employees.
True False

14. When a clerk enters a sale and the customer can see the amount displayed and is given a cash receipt, this is
an example of a preventive control.
True False

15. If the balance in Cash Short and Over at the end of a period is a credit, it indicates that cash shortages have
exceeded cash overages for the period.
True False

16. If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an "other
income" item on the income statement.
True False

17. An example of good internal controls over cash payments is the taking of all cash discounts offered.
True False

18. A voucher is a form on which is recorded pertinent data about a liability and the particulars of its payment.
True False

19. When the voucher system is used, the amount due on each voucher represents the credit balance of an
account payable if the voucher is in full payment to a creditor.
True False

20. A voucher system is an example of an internal control procedure over cash payments.
True False

21. A voucher is a written authorization to make a cash payment.
True False

22. A payment system that uses computerized electronic impulses to effect a cash transaction is called
electronic funds transfer (EFT).
True False

23. A remittance advice is the notification accompanying the check issued to a creditor that states the specific
invoice being paid.
True False

24. The bank often informs the company of bank service charges by including a credit memo with the monthly
bank statement.
True False

25. Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances
on the bank's records.
True False


26. Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over
cash.
True False

27. For efficiency of operations and better control over cash, a company should maintain only one bank
account.
True False

28. In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank
statement.
True False

29. In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank
statement.
True False

30. In preparing a bank reconciliation, the amount indicated by a debit memo for bank service charges is added
to the balance per company's records.
True False

31. In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the
balance per company's records.
True False

32. A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to

balance, you must add $90 to the bank statement balance.
True False

33. If an adjustment for an NSF check is made in a company’s bank reconciliation, then the company must have
written a bad check during the month.
True False


34. The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount
that is shown on the balance sheet for that date.
True False

35. All bank memos reported on the bank reconciliation require entries in the company's accounts.
True False

36. The bank reconciliation is an important part of the system of internal controls.
True False

37. The main reason that the bank statement cash balance and the company's cash balance do not initially
balance is due to timing differences.
True False

38. The bank reconciles its statement to the company's records.
True False

39. In preparing a bank reconciliation, the amount indicated by a credit memo for a note receivable collected by
the bank is added to the balance per company's records.
True False

40. In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal

for an amount larger than the amount of the check is added to the balance per company's records.
True False

41. A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.
True False

42. After a bank reconciliation is completed, adjusting entries are prepared for items in the balance per
company's records as well as items in the balance per bank statement.
True False


43. A business that requires all cash payments be made by check can not use a petty cash system.
True False

44. In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to
Accounts Payable and a credit to Petty Cash.
True False

45. Expenditures from a petty cash fund are documented by a petty cash receipt.
True False

46. The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the
balance in the Petty Cash account.
True False

47. When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures
made since the fund was last replenished.
True False

48. Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately

on the balance sheet.
True False

49. A petty cash fund is used to pay relatively large amounts.
True False

50. The petty cash fund eliminates the need for a bank checking account.
True False

51. A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.
True False


52. Cash equivalents are short -term investments that will be converted to cash within 120 days.
True False

53. Money market accounts, commercial paper, and United States Treasury Notes are examples of cash
equivalents.
True False

54. The doomsday ratio includes both cash and cash equivalents in the numerator.
True False

55. Which one of the following below is not an element of internal control?
A. risk assessment
B. monitoring
C. information and communication
D. cost-benefit considerations

56. Which one of the following below is not a factor that influences a business's control environment?

A. management's philosophy and operating style
B. organizational structure
C. proofs and security measurers
D. personnel policies

57. When a firm uses internal auditors, it is adhering to which one of the following internal control elements?
A. risk assessment
B. monitoring
C. proofs and security measures
D. separating responsibilities for related operations

58. The objectives of internal control are to
A. control the internal organization of the accounting department personnel and equipment
B. provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate,
and laws and regulations are complied with
C. prevent fraud, and promote the social interest of the company
D. provide control over "internal-use only" reports and employee internal conduct


59. Which one of the following below reflects a weak internal control system?
A. all employees are well supervised
B. a single employee is responsible for comparing a receiving report to an invoice
C. all employees must take their vacations
D. a single employee is responsible for collecting and recording of cash

60. Internal control does not consist of policies and procedures that
A. protect assets from misuse
B. aid management in directing operations toward achieving business goals
C. guarantee the company will not go bankrupt
D. ensure that business information is accurate

61. A firm's internal control environment is not influenced by
A. management's operating style
B. organizational structure
C. personnel policies
D. monitoring policies

62. An element of internal control is
A. risk assessment
B. journals
C. subsidiary ledgers
D. controlling accounts

63. A necessary element of internal control is
A. database
B. systems design
C. systems analysis
D. information and communication

64. In management's internal control report that is now required of all public companies, which of the following
does not have a direct effect on a company's internal control system?
A. internal auditors
B. independent accountants
C. Board of Director's audit committee
D. Board of Trustees


65. Which of the following should not be considered cash by an accountant?
A. money orders
B. bank checking accounts

C. postage stamps
D. travelers' checks

66. The cash account in the company's ledger is a(n)
A. asset with a debit balance
B. asset with a credit balance
C. liability with a debit balance
D. liability with a credit balance

67. The notification accompanying a check that indicates the specific invoice being paid is called a
A. remittance advice
B. voucher
C. debit memo
D. credit memo

68. The debit balance in Cash Short and Over at the end of an accounting period is reported as
A. an expense on the income statement
B. income on the income statement
C. an asset on the balance sheet
D. a liability on the balance sheet

69. An example of a preventive control is
A. a single person handles the responsibilities for operations, custody of assets, and accounting
B. separation of the Purchasing Department and Accounting Department personnel
C. bonding employees who handle cash
D. accepting payment in currency only

70. Procedures designed to protect cash from theft and misuse from the time it is received until it can be
deposited in a bank are called
A. accounting controls

B. cash controls
C. preventive controls
D. detective controls


71. A special form on which is recorded pertinent data about a liability and the particulars of its payment is
called a(n)
A. invoice
B. voucher
C. debit memo
D. remittance advice

72. EFT
A. means Efficient Funds Transfer
B. can process certain cash transactions at less cost than by using the mail
C. makes it easier to document purchase and sale transactions
D. means Effective Funds Transfer

73. A voucher
A. is received from customers to explain the purpose of a payment
B. is normally prepared in the Accounting Department
C. system is used to control cash receipts
D. system is an internal control procedure to verify that the assets in the ledger are the ones the company owns

74. A voucher is usually supported by
A. a supplier's invoice
B. a purchase order
C. a receiving report
D. all of the above

75. The reconciliation of the cash register tape with the cash in the register is an example of
A. other controls.
B. independent internal verification.
C. establishment of responsibility.
D. segregation of duties.

76. Which of the following is not an internal control activity for cash?
A. The number of persons who have access to cash should be limited.
B. All cash receipts should be recorded promptly.
C. The functions of record keeping and maintaining custody of cash should be combined.
D. Surprise audits of cash on hand should be made occasionally.


77. The term cash includes
A. coins, currency (paper money), checks
B. money orders, and money on deposit that is available for unrestricted withdrawal
C. short-term receivables
D. both a and b

78. On the bank's accounting records, customers' accounts are normally shown as
A. debit balances
B. expenses
C. an asset
D. a liability

79. Credit memos from the bank
A. decrease a bank customer's account
B. are used to show a bank service charge
C. show that a company has deposited a customer's NSF check
D. show the bank has collected a note receivable for the customer

80. A bank statement
A. is a credit reference letter written by the company's bank.
B. lets a company know the financial position of the bank as of a certain date.
C. is a bill from the bank for services rendered.
D. shows the activity that increased or decreased the company's account balance.

81. Which one of the following would not cause a bank to debit a company's account?
A. Bank service charge
B. Collection of a note receivable
C. Checks marked NSF
D. Wiring of funds to other locations

82. There are three parties to a check. The drawer is
A. a written document signed by the company
B. is the one who signs the check ordering payment by the bank
C. the bank on which the check is drawn
D. the party to whom payment is to be made


83. A debit or credit memo describing entries in the company's bank account may be enclosed with the bank
statement. An example of a credit memo is
A. deposited checks returned for insufficient funds
B. a promissory note left for collection
C. a service charge
D. notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket

84. Following the completion of the bank reconciliation, an adjusting entry was made that debited cash and
credited Interest Revenue. Therefore the bank reconciliation must have included an item that was
A. deducted from the balance per company's records

B. deducted from the balance per bank statement
C. added to the balance per bank statement
D. added to the balance per company's records

85. A person authorized to write checks drawn on a checking account at a bank must sign and have on file with
the bank a
A. signature card
B. deposit ticket
C. checkbook
D. bank card

86. A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This
item would be included on the bank reconciliation as a(n)
A. addition to the balance per the company's records
B. addition to the balance per the bank statement
C. deduction from the balance per the bank statement
D. deduction from the balance per the company's records

87. A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What
entry is required in the company's accounts?
A. debit Accounts Payable; credit Cash
B. debit Cash; credit Accounts Receivable
C. debit Cash; credit Accounts Payable
D. debit Accounts Receivable; credit Cash


88. A bank reconciliation should be prepared periodically because
A. the company's records and the bank's records are in agreement
B. the bank has not recorded all of its transactions
C. any differences between the company's records and the bank's records should be determined, and any errors

made by either party should be discovered and corrected
D. the bank must make sure that its records are correct

89. The bank reconciliation
A. should be prepared by an employee who records cash transactions
B. is part of the internal control system
C. is for information purposes only
D. is sent to the bank for verification

90. Journal entries based on the bank reconciliation are required in the company's accounts for
A. outstanding checks
B. deposits in transit
C. bank errors
D. book errors

91. Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation,
the item is
A. a deduction from the balance per company's records
B. an addition to the balance per bank statement
C. a deduction from the balance per bank statement
D. an addition to the balance per company's records

92. Accompanying the bank statement was a debit memo for bank service charges. What entry is required in
the company's accounts?
A. debit Miscellaneous Administrative Expense; credit Cash
B. debit Cash; credit Other Income
C. debit Cash; credit Accounts Payable
D. debit Accounts Payable; credit Cash

93. A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This

item would be included in the bank reconciliation as a(n)
A. deduction from the balance per the company's records
B. addition to the balance per the bank statement
C. deduction from the balance per the bank statement
D. addition to the balance per the company's records


94. A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What
entry is required in the company's accounts?
A. debit Accounts Payable; credit Cash
B. debit Cash; credit Accounts Receivable
C. debit Cash; credit Accounts Payable
D. debit Accounts Receivable; credit Cash

95. Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This
item would be included on the bank reconciliation as a(n)
A. deduction from the balance per company's records
B. addition to the balance per bank statement
C. deduction from the balance per bank statement
D. addition to the balance per company's records

96. Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. What
entry is required in the company's accounts?
A. debit Sales; credit Cash
B. debit Cash; credit Accounts Receivable
C. debit Cash; credit Sales
D. debit Accounts Receivable; credit Cash

97. Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the
company. This item is a(n)

A. deduction from the balance per company's records
B. addition to the balance per bank statement
C. deduction from the balance per bank statement
D. addition to the balance per company's records

98. Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the
customer. What entry is required in the company's accounts?
A. debit Notes Receivable; credit Cash
B. debit Cash; credit Miscellaneous Income
C. debit Cash; credit Notes Receivable
D. debit Accounts Receivable; credit Cash


99. The amount of deposits in transit is included on the bank reconciliation as a(n)
A. deduction from the balance per the company's books
B. deduction from the balance per bank statement
C. addition to the balance per bank statement
D. addition to the balance per company books

100. The amount of the outstanding checks is included on the bank reconciliation as a(n)
A. deduction from the balance per company's records
B. addition to the balance per bank statement
C. deduction from the balance per bank statement
D. addition to the balance per company's records

101. Which of the following items that appeared on the bank reconciliation did not require an adjusting entry?
A. bank service charges
B. deposits in transit
C. NSF checks
D. A check for $630, recorded in the check register for $360.

102. What entry is required in the company's accounts to record outstanding checks?
A. debit Accounts Receivable; credit Cash
B. debit Cash; credit Accounts Receivable
C. debit Cash; credit Accounts Payable
D. none

103. Accompanying the bank statement was a debit memo for an NSF check received from a customer. This
item would be included on the bank reconciliation as a(n)
A. deduction from the balance per company's records
B. addition to the balance per bank statement
C. deduction from the balance per bank statement
D. addition to the balance per company's records

104. Accompanying the bank statement was a debit memo for an NSF check received from a customer. What
entry is required in the company's accounts?
A. debit Other Income; credit Cash
B. debit Cash; credit Other Income
C. debit Cash; credit Accounts Receivable
D. debit Accounts Receivable; credit Cash


105. The amount of cash to be reported on the balance sheet at June 30 is the
A. total of the cash column in the cash receipts journal as of June 30
B. adjusted balance appearing in the bank reconciliation for June 30
C. total of the cash column in the cash payments journal as of June 30
D. balance as of June 30 on the bank statement

106. Which of the following would be added to the balance per books on a bank reconciliation?
A. Service charges

B. Outstanding checks
C. Deposits in transit
D. Notes collected by the bank

107. Which of the following would be subtracted from the balance per books on a bank reconciliation?
A. Outstanding checks
B. Deposits in transit
C. Notes collected by the bank
D. Service charges

108. Which of the following would be subtracted from the balance per bank on a bank reconciliation?
A. Outstanding checks
B. Deposits in transit
C. Notes collected by the bank
D. Service charges

109. A bank reconciliation should be prepared
A. whenever the bank refuses to lend the company money.
B. to explain any difference between the company's balance per books with the balance per bank.
C. by the company's bank.
D. by the person who is authorized to sign checks.

110. Harris Company had checks outstanding totaling $15,400 on its May bank reconciliation. In June, Harris
Company issued checks totaling $64,900. The June bank statement shows that $47,600 in checks cleared the
bank in June. A check from one of Harris Company's customers in the amount of $300 was also returned
marked "NSF." The amount of outstanding checks on Harris Company's June bank reconciliation should be
A. $49,500
B. $63,000
C. $47,600
D. $32,700

111. Meredith Company gathered the following reconciling information in preparing its May bank
reconciliation:

Cash balance per books, 5/31
Deposits in transit
Notes receivable and interest collected by bank
Bank charge for check printing
Outstanding checks
NSF check

$4,500
375
650
40
2,400
140

T
he
adjus
ted
cash
balan
ce
per
book
s on
May

31 is

A. $4,970
B. $5,120
C. $8,105
D. $3,295
112. Derek Company gathered the following reconciling information in preparing its September bank
reconciliation:

Cash balance per books, 9/30
Deposits in transit
Notes receivable and interest collected by bank
Bank charge for check printing
Outstanding checks
NSF check
T
he
adjus
ted
cash
balan
ce
per
book
s on
Septe
mber
30 is

A. $5,150.

B. $3,710.
C. $3,060.
D. $1,610.

$2,750
200
630
30
1,250
290


113. Jamison Company developed the following reconciling information in preparing its June bank
reconciliation:

Cash balance per bank, 6/30
Note receivable collected by bank
Outstanding checks
Deposits-in-transit
Bank service charge
NSF check

$13,000
4,000
7,000
2,500
35
1,900

Using the above information, determine the cash balance per books (before adjustments) for the Jamison Company.

A. $8,065
B. $10,565
C. $15,065
D. $6,435
114. Thompson Company developed the following reconciling information in preparing its October bank
reconciliation:

Cash balance per bank, 10/31
Note receivable collected by bank
Outstanding checks
Deposits-in-transit
Bank service charge
NSF check

$17,000
4,800
6,500
3,000
50
2,300

Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

A. $11,050
B. $19,450
C. $15,950
D. $11,150
115. During a bank reconciliation process,
A. Outstanding checks and deposits in transit are added to the bank statement balance.

B. Outstanding checks are subtracted and deposits in transit are added to the bank statement balance.
C. Outstanding checks and deposits in transit are subtracted from the bank statement balance.
D. Outstanding checks are added and deposits in transit are subtracted from the bank statement balance.


116. In the normal operation of business you receive a check from a customer and deposit it into your checking
account. With your bank statement you are advised that this check for $775 is “NSF”. The bank also informs
you that due to the amount of activity on your business account the monthly service charge is $75. During a
bank reconciliation, you will:
A. subtract both values from balance according to bank.
B. add both values from balance according to books.
C. add both values from balance according to bank.
D. subtract both values from balance according to books.

117. A $150 petty cash fund has cash of $44 and receipts of $93. The journal entry to replenish the account
would include a
A. credit to Petty Cash for $49.
B. debit to Cash for $93.
C. debit to Cash Over and Short for $13.
D. credit to Cash for $44.

118. A $135 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account
would include a
A. credit to Petty Cash for $110.
B. debit to Cash for $110.
C. credit to Cash Over and Short for $3.
D. credit to Cash for $82.

119. Entries are made to the Petty Cash account when
A. making payments out of the fund.

B. recording shortages in the fund.
C. replenishing the petty cash fund.
D. establishing the fund.

120. The type of account and normal balance of Petty Cash is a(n)
A. revenue, credit
B. asset, debit
C. liability, credit
D. expense, debit


121. The debit recorded in the journal to reimburse the petty cash fund is to
A. Petty Cash
B. Accounts Receivable
C. Cash
D. various accounts for which the petty cash was disbursed

122. A $100 petty cash fund contains $91 in petty cash receipts, and $4.75 in currency and coins. The journal
entry to record the replenishment of the fund would include a
A. credit to Petty Cash for $95.75.
B. credit to Cash for $90.
C. debit to Cash Short and Over for $4.25.
D. credit to Cash Short and Over for $4.25.

123. A $140 petty cash fund has cash of $20 and receipts of $117. The journal entry to replenish the account
would include a credit to
A. Cash for $20.
B. Cash Over and Short for $3.
C. Petty Cash for $120.
D. Cash for $120.

124. Cash equivalents include
A. checks
B. coins and currency
C. money market accounts and commercial paper
D. stocks and short-term bonds

125. Cash equivalents
A. are illegal in some states
B. will be converted to cash within two years
C. will be converted to cash within 90 days
D. will be converted to cash within 120 days

126. A minimum cash balance required by a bank is called
A. cash in bank
B. cash equivalent
C. compensating balance
D. EFT


127. Which of the following would not be included with the Cash and Equivalents on the Balance Sheet?
A. Commercial Paper
B. Short-Term Receivables
C. Certificates of Deposit
D. Money Market Mutual Funds

128. During 2010, Tempo Inc has monthly cash expenses of $115,000. On December 31, 2010, their cash
balance is $1,437,500. The ratio of cash to monthly cash expenses is
A. 8.0
B. 12.5

C. 87.5
D. 11.5

129. The following data were gathered to use in reconciling the bank account of Savannah Company:

Balance per bank
Balance per company records
Bank service charges
Deposit in transit
NSF check
Outstanding checks

$16,750
16,125
80
2,195
950
3,850

What is the adjusted balance on the bank reconcilition?

A. $14,470
B. $10,705
C. $15,095
D. $15,720
130. Consider the cash account below.
Additional Information: cash disbursements were 80% of collections.

Cash
??

115,375
??
80,275

Beg. Balance
Collections
Disbursements
End Balance

How much was the Beginning Balance of the Cash Account?

A. $57,200
B. $92,300
C. $103,350
D. $35,100


131. Which of the following would be deducted from the balance per books on a bank reconciliation?
A. Service charges
B. Outstanding checks
C. Deposits in transit
D. Notes collected by the bank

132. Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control
procedures.
1. Mandatory vacations
2. Personnel policies
3. Report of outside consultants on future market changes

133. Distinguish preventive controls from detective controls and give examples of each as they relate to cash.

134. List the objectives of internal control and give an example of how each is implemented.


135. You began your new job as the accountant at Bolivar Industries during the month of December. During
your first month, you found several interesting issues.
1) While looking through the invoices, you found Invoices 213-242, 245-271, and 275-290. It appears that
invoices 243, 244, 272, 273, and 274 are missing.
2) During the month, Clerk # 3 issued $250 in refunds as compared to Clerks #1, #2, and #4 who issued less
than $50 each.
3) The daily cash receipts and bank deposits reconcile, except on Tuesdays during the month.
4) Business is generally brisk during the holiday season, but two weeks before Christmas there was a sudden
increase in slow payments.
REQUIRED:
Part A: What kind of warning signs could be associated with these issues?
Part B: What control could you put in place regarding cash refunds mentioned in Part A (2)?

136. The following procedures were recently implemented at the Health Station, Inc. For each procedure,
indicate whether the internal control over cash represents (1) a strength or (2) a weakness. If it is a weakness,
please explain why.
(a) All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares a
listing of the cash receipts and forwards a copy of the list to the accounts receivable clerk for recording in the
accounts.
(b) The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the
supporting documentation is forwarded to the treasurer’s office for approval.
(c) At the end of each day, all cash receipts are placed in the bank’s night depository.
(d) The bank reconciliation is prepared by the cashier, who works under the supervision of the treasurer.


137. The following procedures were recently implemented at the Pampered Pets, Inc. For each procedure,

indicate whether the internal control over cash represents (1) a strength or (2) a weakness. If it is a weakness,
please explain why.
(a) At the end of the day, cash register clerks are required to use their own funds to make up any cash shortages
in their registers.
(b) At the end of the day, an accounting clerk compares the duplicate copy of the daily cash deposit slip with the
deposit receipt obtained from the bank.
(c) After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails
the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher
and supporting documentation to the accounts payable clerk for filing.
(d) Along with the petty cash expense receipts for postage, office supplies, etc., several post-dated employee
checks are in the petty cash fund.

138. The following selected transactions relate to cash collections for a firm that maintains a $100 change fund
at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.

(a)
(b)

Actual cash in cash register, $4,512.36; cash receipts per cash register tally, $4,413.07.
Actual cash in cash register, $3,812.95; cash receipts per cash register tally, $3,712.16.


139. The actual cash received during the week ended January 16 for cash sales was $7,427 and the amount
indicated by the cash register total was $7,413. Journalize the entry to record the cash receipts and cash sales.
Journal
Date

Description

Post Ref.

Debit

Credit

140. The actual cash received during the week ended October 31 for cash sales was $23,447.00 and the amount
indicated by the cash register total was $23,457.00. Journalize the entry to record the cash receipts and cash
sales.
Journal
Date

Description

Post Ref.

Debit

141. Consider the cash account below.
Additional Information: cash disbursements were 80% of collections.

Cash
??
115,375
??
80,275

Beg. Balance
Collections
Disbursements
End Balance

Credit