Author: Anonymous

A retailer buys products from manufacturers and sells them to wholesalers.

The Cash Over and Short account:

Most large thefts occur from payment of fictitious invoices, which makes control of cash disbursements especially important for companies.

The clerk who has access to the cash in the cash register should also have access to the cash register tape or file.

The number of days’ sales uncollected:

Which of the following events would cause a bank to debit a depositor’s account?

Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $17,025. Clayborn’s May bank statement shows $15,800 on deposit in the bank. Determine the adjusted cash balance using the following information:       Deposit in transit $ 5,200 Outstanding checks $ 4,600 Bank service fees, not yet recorded by company $ 25 A NSF check from a customer, not yet recorded by the company $ 600 The adjusted cash balance should be:

Proper internal control would require that a department manager inform the purchasing department of its needs for additional merchandise by preparing and signing a purchase requisition which lists the merchandise needed and requests that it be purchased.

Purchase allowances refer to a price reduction (allowance) granted to a buyer of defective or unacceptable merchandise.

The materiality constraint, as applied to bad debts: