Which of the following is not one of the five categories of control activities?

a. Checks on recorded amounts

b. Defalcation and financial reporting

c. Clearly defined authority and responsibility

d. Segregation of duties

Effective cash management is very important to the operating performance of a business.

Required:

Explain the principles of cash management. Why might it be advantageous to delay paying suppliers?

Businesses must decide whether to issue credit to customers.

Required:

Describe how selling to customers on credit affects the operating cycle.

Richter Industries has the following items:

Required:

How much should Richter report as cash and equivalents on its balance sheet?

Which transaction would require adjustment at December 31?

a. The sale of merchandise for cash on December 30.

b. Common stock was issued on November 30.

c. Salaries were paid to employees on December 31 for work performed in December.

d. A 1-year insurance policy (which took effect immediately) was purchased on December 1.

Canary Inc. maintains a petty cash fund with a balance of $1,800. During the month of September, Canary’s employees made routine expenses using cash from the petty cash fund totaling$1,150. At the end of September, Canary replenishes the petty cash account, but it also decides to increase the fund balance to $2,000. Canary classifies all petty cash transactions as miscellaneous expense.

Required:

What entry is made to record this activity?

Kingery Inc. maintains a balance of $3,000 in its petty cash fund for routine purchases such as supplies. During the year, Kingery’s employees paid for various office supplies and food purchases for office birthdays. As a result, Kingery’s petty cash account has a balance of$374 on December 31, 2019. At the end of each year, Kingery replenishes the petty cash in full. Kingery classifies all petty cash transactions as miscellaneous expense.

Required:

What entry is made to record the replenishment of the petty cash fund?

Milner Department Store has one cash register on which it performs daily cash counts. Recently, the cash count indicated that there was $9,218.47 in the register after deducting and removing the opening change amount of$50. However, the cash register tape reported sales in the amount of $9,217.85. Milner deposited its cash collected in its bank account.

Required:

Prepare a journal entry to record these cash collections.

At the end of each day, Spangle counts the cash in its cash registers. Spangle then compares the physical amount of cash to the amount of cash that the register tape indicates should be in the cash drawer. On a recent day, Spangle Company obtained the following data from its cash registers:

$$\begin{array}{lcc} &&\textbf{Cash in Register}\\ &\textbf{Cash Sales per}&\textbf{after Removing}\\ &\textbf{Register Tape}&\textbf{Opening Change}\\\hline \text{Register 1}~~~~~~~~~&\$14,759.62&\$14,757.98\\ \text{Register 2}&~~15,101.59&~~15,104.06\\ \text{Register 3}&~~14,802.18&~~14,798.87\\ \end{array}$$

Spangle deposits its cash receipts in its bank account daily.

Required:

Prepare a journal entry to record these cash sales.

Zing Corp. prepares monthly bank reconciliations as part of its cash controls. Zing’s bank provided the following amount about Zing’s cash balance at the bank for during the month of April 2020:

Zing then analyzed its cash balance on its own set of books, revealing the following details:

Required:

Record any necessary adjusting journal entries.

Zing Corp. prepares monthly bank reconciliations as part of its cash controls. Zing’s bank provided the following amount about Zing’s cash balance at the bank for during the month of April 2020:

Zing then analyzed its cash balance on its own set of books, revealing the following details:

Required:

1. Prepare a bank reconciliation at April 30, 2020, in proper form.

2. Record any necessary adjusting journal entries.

Garrison Corporation was closing its books on May 31, 2020. Garrison’s accountant prepared a bank reconciliation as of May 31, 2020, and has found the following possible reconciling items between its book balance and its cash balance per the bank:

In the search for reconciling items, the accountant also discovered that Garrison made an error in recording a customer’s check: the amount was recorded in cash receipts as$290; the bank recorded the amount correctly as $920.

Required:

What amount will Garrison report as its adjusted cash balance at May 31, 2020?

Which of the following is not one of the five components of internal control?

a. Analysis of control procedures

b. Information and communication

c. Risk assessment

d. Control environment

The Sarbanes-Oxley Act increased top management’s responsibility for what?