Which of the following is not a factor that influences a business's control environment?

a.personnel policies

b.proofs and security measures

c.management's philosophy and operating style

d.organizational structure

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

a.debit Cash; credit Other Income

b.debit Cash; credit Accounts Receivable

c.debit Other Income; credit Cash

d.debit Accounts Receivable; credit Cash

Entries are made to the petty cash account when

a.recording shortages in the fund

b.making payments out of the fund

c.replenishing the petty cash fund

d.establishing the fund

Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Mathers Co. for July:

1. Cash balance according to the company's records at July 31 $19,270.

2. Cash balance according to the bank statement at July 31, $20,360.

3. Checks outstanding, $3,910.

4. Deposit in transit, not recorded by bank, $3,140.

5. A check for $590 in payment of an account was erroneously recorded in the check register as $950.

6. Bank debit memo for service charges, $40.

a. Prepare a bank reconciliation, using the format shown in Exhibit 14.

Mathers Co.
Bank Reconciliation
July 31
Cash balance according to bank statement	$
Adjusted balance	$
Cash balance according to company's records	$
Adjusted balance	$

b. If the balance sheet is prepared for Mathers Co. on July 31, what amount should be reported for cash? $

c. Must a bank reconciliation always balance (reconcile)?