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Cash equivalents are highly liquid investments that can be converted into a specific
amount of cash.
Answer:
Three dates are important in connection with cash dividends. Identify these dates, and
explain their significance to the corporation and its stockholders.
Answer:
Postings are generally made more frequently to the general ledger control accounts than
to the individual accounts in the subsidiary ledgers.
Answer:
Six internal control principles related to cash transactions are discussed in the textbook.
These principles, with code letters, are:
Instructions: Match the above principles to the following applications related to cash
receipts and cash disbursements by placing the code in the space provided. Each code
letter can be used once, more than once, or not at all.
____ 1> Cash is received by one employee and recorded in the accounting records by
another.
____ 2> Daily cash counts should be made by cashier department supervisors.
____ 3> Payments are approved by one employee while the disbursement is made by
another.
____ 4> All checks are pre-numbered.
____ 5> Only the treasurer is authorized to sign checks.
____ 6> Cash register tapes are used for over-the-counter receipts.
____ 7> Each check is compared with an approved invoice before being issued.
____ 8> Employee hours are tracked using a time clock.
____ 9> All personnel who handle cash should be bonded.
____ 10> Inventory is stored in a locked warehouse with restricted access.
Answer:
Internal control is mainly concerned with the amount of authority a supervisor exercises
over a subordinate.
Answer:
