Question : 71.Internal control systems are: A.Developed by the Securities and Exchange Commission : 1258892

 

 

71.Internal control systems are:   

A.Developed by the Securities and Exchange Commission for public companies.

 

B.Developed by the Small Business Administration for non-public companies.

 

C.Developed by the Internal Revenue Service for all U.S. companies.

 

D.Required by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock is traded on an exchange.

 

E.Required only if a company plans to engage in interstate commerce.

 

 

 

 

72.Cash, not including cash equivalents, includes:   

A.Postage stamps.

 

B.Customer checks, cashier checks, and money orders.

 

C.IOUs.

 

D.Two-year certificates of deposit.

 

E.Money market funds.

 

 

 

 

73.Cash equivalents:   

A.Are short-term, highly liquid investment assets.

 

B.Include 6-month certificates of deposit.

 

C.Include checking accounts.

 

D.Are recorded in petty cash.

 

E.Include money orders.

 

 

 

 

74.Cash equivalents:   

A.Include savings accounts.

 

B.Include checking accounts.

 

C.Are readily converted to a known cash amount.

 

D.Include time deposits.

 

E.Have no immediate value.

 

 

 

 

75.Cash equivalents meet all of the following criteria except:   

A.Are readily convertible to a known cash amount.

 

B.Include short-term investments purchased within 3 months of their maturity dates.

 

C.Have a market value that is not sensitive to interest rate changes.

 

D.Include short-term U.S. treasury bills.

 

E.Are more liquid than cash.

 

 

 

 

76.The following information is available for Birch Company at December 31: 

Money market fund balance$2,790

Certificate of deposit maturing June 30 of next year$10,000

Postdated checks from customers$1,475

Cash in bank account$21,430

NSF checks from customers returned by bank$650

Cash in petty cash fund$200

Inventory of postage stamps$24

U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year$5,000

Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:    

A.$29,420

 

B.$41,345

 

C.$31,345

 

D.$39,420

 

E.$38,770

Add $2,790 in money market fund + $21,430 of cash in bank + $200 of cash in petty cash fund + $5,000 of U.S. Treasury bill with maturity of less than three months on date of purchase = $29,420.

 

 

 

77.The following information is available for Fenton Manufacturing Company at June 30: 

Cash in bank account$11,455

Inventory of postage stamps$74

Money market fund balance$10,400

Petty cash balance$350

NSF checks from customers returned by bank$867

Postdated checks received from customers$791

Money orders$290

A nine-month certificate of deposit maturing on December 31 of current year$6,000

Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of:    

A.$28,495

 

B.$29,286

 

C.$23,286

 

D.$12,095

 

E.$22,495

Add $11,455 of cash in bank + $10,400 of money market fund, $350 of petty cash balance + $290 of money orders = $22,495.

 

 

 

78.The following information is available for Montrose Company at December 31: 

Cash in bank account$8,540

Petty cash250

Money market fund balance$10,400

Checks from customers$1,350

NSF checks from customers returned by bank$805

Treasury bill maturing in 60 days$10,000

Money orders$290

A nine-month certificate of deposit maturing on March 31 of next year$6,000

Based on this information, the amounts considered Cash and Cash Equivalents, respectively on December 31 are:    

A.Cash $10,430; Cash equivalents $20,400

 

B.Cash $8,540; Cash equivalents $22,290

 

C.Cash $8,790; Cash equivalents $26,400

 

D.Cash $19,190; Cash equivalents $16,000

 

E.Cash $11,235; Cash equivalents $26,400

Cash = Cash in bank account $8,540 + Petty cash $250 + Checks from customers $1,350 + Money orders $290 = $10,430Cash equivalents = Money market fund $10,400 + Treasury bills $10,000 = $20,400

 

 

 

79.Basic bank services do not include:    

A.Bank accounts.

 

B.Bank deposits.

 

C.Checking.

 

D.Electronic funds transfer.

 

E.Petty cash management.

 

 

 

 

80.The three parties involved with a check are:   

A.The writer, the cashier, and the bank.

 

B.The maker, the payee, and the bank.

 

C.The maker, the manager, and the payee.

 

D.The bookkeeper, the payee, and the bank.

 

E.The signer, the cashier, and the company.