Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.23BE
Internal Controls. Identify whether the following internal control procedures relate to cash receipts or cash disbursements.
| Internal Control Procedure | Cash Receipt? | Cash Disbursement? |
| All payments must be made by check except for immaterial payments made from petty cash. | _________ | _________ |
| Checks can be signed only by authorized individuals. | _________ | _________ |
| The summary of checks is sent to the employee in charge of preparing the cash receipts journal | _________ | _________ |
| The summary of checks is forwarded to the employee responsible for depositing checks. | _________ | _________ |
| Authorization is required prior to preparing a check. | _________ | _________ |
| An employee will receive checks, open the envelopes, and prepare a cash receipts summary. The summary should include the customer name, account number, and the amount of the check. | _________ | _________ |
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Students have asked these similar questions
Which of the following are important elements of a cash disbursement control system?
Note: Select all that apply.
Check All That Apply
All expenditures are authorized before a check is prepared.
Checks are signed only by authorized Individuals.
The bank-generated deposit slip should be compared with the check listing.
The person opening the mall is not the person who maintains the accounting records.
Unauthorized payments are prevented.
For proper segregation of duties in cash disbursements, the person who signs checks also
a.
reviews the monthly bank reconciliation
b.
is denied access to the supporting documents
c.
returns the cheques to accounts payable
d.
is responsible for mailing the cheques
1. Cash control systems are the methods and procedures used to ensure --
a. That current obligations are met
b. That excess cash does not exists
c. The safeguarding of cash
d. That unused cash is invested
2. Bank reconciliation -
a. Is the process of transferring money in or out of a bank account
b. Requires that every transaction which will result in a cash payment be verified, approved and recorded before a bank check is prepared.
c. Is an analysis that reflects the bank transactions made by the depositor
d. Explains the difference between the bank balance and the balance shown in the depositor’s records
3. The journal entries for bank reconciliation -
a. are taken from the balance per bank only
b. may include a debit to office expense for bank service charges
c. may include a credit to accounts receivable for an NSF check
d. may include a debit to accounts…
Chapter 9 Solutions
Intermediate Accounting
Ch. 9 - Prob. 9.1QCh. 9 - Do companies always classify cash as a current...Ch. 9 - Prob. 9.3QCh. 9 - Do accountants typically measure accounts...Ch. 9 - Under the allowance method, will the actual...Ch. 9 - How does an entity record a subsequent recovery of...Ch. 9 - Does the aging of accounts receivable method of...Ch. 9 - Prob. 9.8QCh. 9 - What is the difference between pledging accounts...Ch. 9 - How do companies account for receivables that are...
Ch. 9 - Is the face value of a note receivable exchanged...Ch. 9 - What do firms use to record the sales value of a...Ch. 9 - Explain why a company must have highly effective...Ch. 9 - The following are held by YRT Corporation at...Ch. 9 - Fernandez Company had an accounts receivable...Ch. 9 - On its December 31, Year 2, balance sheet, Red...Ch. 9 - Stanberry Company sold 500,000 of net accounts...Ch. 9 - On November 30, Year 1, Derin Corporation agreed...Ch. 9 - Which of the following disclosures about accounts...Ch. 9 - Prob. 9.1BECh. 9 - Prob. 9.2BECh. 9 - Prob. 9.3BECh. 9 - Prob. 9.4BECh. 9 - Prob. 9.5BECh. 9 - Sales Discounts, Most-Likely-Amount Method. On...Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Recovery....Ch. 9 - Bad Debt Expense, Journal Entry. Paul Anchor...Ch. 9 - Bad Debt Expense. Journal Entry. Paul Anchor,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.13BECh. 9 - Prob. 9.14BECh. 9 - Prob. 9.15BECh. 9 - Assigned Receivables. Using the information...Ch. 9 - Factoring Receivables without Recourse. Nicks...Ch. 9 - Prob. 9.18BECh. 9 - Prob. 9.19BECh. 9 - Prob. 9.20BECh. 9 - Prob. 9.21BECh. 9 - Prob. 9.22BECh. 9 - Internal Controls. Identify whether the following...Ch. 9 - Prob. 9.24BECh. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - Prob. 9.1ECh. 9 - Volume Discounts, Sales Discounts. Sodesta Company...Ch. 9 - Prob. 9.3ECh. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Prob. 9.5ECh. 9 - Prob. 9.6ECh. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Percentage of Accounts...Ch. 9 - Prob. 9.9ECh. 9 - Assigning Receivables, Factoring Receivables....Ch. 9 - Prob. 9.11ECh. 9 - Factoring Receivables with and without Recourse....Ch. 9 - Factoring Receivables without Recourse, Factoring...Ch. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.18ECh. 9 - Prob. 9.1PCh. 9 - Prob. 9.2PCh. 9 - Prob. 9.3PCh. 9 - Prob. 9.4PCh. 9 - Prob. 9.5PCh. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.7PCh. 9 - Prob. 9.8PCh. 9 - Prob. 9.9PCh. 9 - Prob. 9.10PCh. 9 - Prob. 9.11PCh. 9 - Prob. 1JCCh. 9 - Prob. 2JCCh. 9 - Prob. 1FSACCh. 9 - Prob. 1SSCCh. 9 - Prob. 2SSCCh. 9 - Prob. 1BCC
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- 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 incomearrow_forwardIn testing controls over cash disbursements, an auditor most likely would determine that the person who signs checks also a. Returns the checks to accounts payable.b. Records the payment in the cash disbursements journalc. Stamped "paid" the supporting documents.d. Updates the accounts payable subsidiary ledger.arrow_forwardEffective internal control over accounts receivable ensures all of the following except: Select one: O a. All shipments of goods during the period are recorded. O b. That cash collections from customers are promptly deposited. Oc. The sale transaction is recorded for the correct dollar amount. Od. The availability of adequate cash for conducting business operations.arrow_forward
- Which of the following is an internal control guideline for better management of cash receipts? a.Endorse checks immediately upon receipt with the stamp "For Receipt Only". b.Maintain separation of duties between cash handling and cash recording. c.A bookkeeper should be designated to open all the mail in a company. d.Post cash receipts to the Accounts Payable account as soon as possible.arrow_forwardWhich of the following is not an example of control procedures to safeguard cash received from accounts receivables? A.All receipts of cash should be recorded in the cash acount B.Employees keep records of all the receipts,with details of the amount received C.One employee is in charge of receiving cash and another employee in charge of preparing accouting records D.One employee should be responsible for collecting and banking cash receipts on a daily basisarrow_forwardThe 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 verificationarrow_forward
- Which of the following is an internal control that will prevent paid cash disbursementdocuments from being presented for payment a second time?(1) The date on cash disbursement documents must be within a few days of the datethat the document is presented for payment.(2) The official signing the check compares the check with the documents and shoulddeface the documents.(3) Unsigned checks are prepared by individuals who are responsible for signing checks.(4) Cash disbursement documents are approved by at least two responsible management officialsarrow_forwardThe preparation of monthly bank account reconciliations is an internal control in place to detect misstatements in cash. Question 46 options: True Falsearrow_forwardWhich of the following items on a cash reconciliation would require a journal entry by the company? O Bank error Deposit in transit ONSF check An outstanding checkarrow_forward
- Which of the following statements are true regarding the control of cash receipts and cash payments? Over-the-counter cash sales should be recorded on a cash register after each sale.arrow_forwardWhich one of the following statements is true? a.Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account. b.Petty cash can be substituted for a chequing account to expedite the payment of all disbursements. c.The person handling the cash should also prepare the bank reconciliation. d.Sound internal control practice dictates that cash disbursements be made by cheque, unless the disbursement is very small.arrow_forwardWhich one of these principles is considered for cash disbursement control Select one: O a. Print check amount by machine O b. Same staff approve and make payment Oc. Reconcile bank statement annually O d. Rarely compare checks to invoicesarrow_forward
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