To enhance internal control in the bank reconciliation process, the bank reconciliation should be prepared O a. with the assistance of the bank's employees. O b. by the supervisor. O c. entirely within the computerized accounting system. O d. by an employee who does not take part in or record cash transactions.

To enhance internal control in the bank reconciliation process, the bank reconciliation should be prepared O a. with the assistance of the bank's employees. O b. by the supervisor. O c. entirely within the computerized accounting system. O d. by an employee who does not take part in or record cash transactions.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter8: Internal Control And Cash

Section: Chapter Questions

Problem 21E

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A bank reconciliation takes time and must balance. An employee was struggling in balancing the bank reconciliation. Her supervisor told her to plug (make an unsupported entry for) the difference, record to Miscellaneous Expense, and simply move on. Discuss the internal controls problem with this directive.
There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records? A. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments.
Which of the following are found on the bank side of the bank reconciliation? A. NSF check B. interest income C. wire transfer into clients account D. deposit in transit
What is the advantage of using technology in the internal control system? A. Passwords can be used to allow access by employees. B. Any cash received does not need to be reconciled because the computer tracks all transactions. C. Transactions are easily changed. D. Employees cannot steal because all cash transactions are recorded by the computer/cash register.
Which of the following items are found on a book side of the bank reconciliation? A. beginning bank balance B. outstanding checks C. interest income D. error made by bank
Which of the following does not explain the differences between the bank statement balance and the customers cash balance? a. Deposit in transit b. Canceled checks c. An NSF check d. Errors e. Interest income
The bank reconciliation ? Please explain with full explanation. 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
Which of the following is a reason that businesses use bank accounts as part of their internal control measures. a.The bank records incoming checks as liabilities. b.Customer’s returned checks can be charged an NSF fee. c.Differences between the company balance and the bank balance will automatically indicate fraud. d.Bank accounts are an independent record of cash transactions.
The mailroom employees send all remittances and remittance advices to the cashier. The cashier deposits the cash in the bank and forwards the remittance advices and duplicate deposit slips to the Accounting Department.a. Indicate the weak link in internal control in the handling of cash receipts.b. How can the weakness be corrected?
Which of the following controls will help prevent skimming? a. The accounts receivable bookkeeper’s duties are separated from preparing the bank deposit b. The accounts receivable bookkeeper has access to collections from customers. c. The accounts receivable bookkeeper is responsible for preparing the bank deposit. d. The accounts receivable bookkeeper makes all entries in the cash receipts book.
Which of the following generally would not be considered good internal control of cash receipts? a. Allowing customers to pay with a debit card. b. Requiring the employee receiving the cash from the customer to also deposit the cash into the company’s bank account. c. Recording cash receipts as soon as they are received. d. Allowing customers to pay with a credit card.
Which of the following scenarios reduces the risk of an employee fraud? Group of answer choices An accountant being responsible for approving payments to a vendor The bank reconciliation being prepared by an accountant Remittance advices being sent directly to the cashier A sales clerk having access to the cash register