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Accounting handout 7 you essay

Task 8. 1 Handout 1 . Internal settings are designed to guard assets, encourage employees to follow along with company procedures, promote functional efficiency, and ensure accurate accounting records. Requirements R1. Which in turn objective is quite important? R2. Which must the internal controls accomplish pertaining to the business to survive? Give your explanation. 2 . The Sarbanes-Oxley Act affects open public companies. Requirement R1. How does the Sarbanes-Oxley Act correspond with internal settings? Be certain. 3. Splitting up of tasks is a key internal control. Requirement R1.

Explain in your own words so why separation of duties is normally described as the cornerstone of internal control for shielding assets. Illustrate what can happen if the same person has custody of the children of an asset and also makes up about the advantage. 4. You will discover 5 qualities identified in the chapter since pitfalls of e-commerce. Need R1. List the 5 characteristics recognized in the chapter as stumbling blocks of ecommerce. 5. Answer the following concerns about the controls in bank accounts: Requirements R1. Which in turn bank control protects against forgery? R2. Which traditional bank control studies what the traditional bank did with all the customer’s money each period?

R3. Which bank control confirms the money put into the financial institution? 6. The Cash account of Safe and Secure Security alarm systems reported an equilibrium of $2, 490 for May thirty-one, 2011. There have been outstanding inspections totaling $500 and a May 31 deposit in transit of $300. The financial institution statement, which came from Tri Cities Lender, listed the May thirty-one balance of $3, fish hunter 360. Included in the bank balance was obviously a collection of $680 on bank account from Thomas Saar, a Safe and Safeguarded customer whom pays the financial institution directly. The financial institution statement likewise shows a $20 services charge and $10 interesting revenue that Safe and Secure earned on the bank stability.

Requirement R1. Prepare Secure and Secure’s bank reconciliation at May possibly 31. several. Review your comes from preparing Safe and Secure Security Systems’ bank reconciliation in difficulty #6. Necessity R1. Journalize the company’s orders that happen from the traditional bank reconciliation. Consist of an explanation with each entry. 1 almost eight. Diedre Chevis sells pieces of furniture for DuBois Furniture Company. Chevis has financial concerns and takes $500 that she received from a client. She grad up the sales through the check out. Requirement R1. What will alert Betsy DuBois, the controller, that something is wrong?. Assessment the internal settings over cash receipts simply by mail presented in the part. Requirement R1. Exactly what can be accomplished by the final step in the process, performed by the controller? 10. A purchasing agent for Westgate Wireless will get the goods that he buys and also approves payment for the goods. Requirements R1. How could this purchasing agent defraud his organization? R2. How could Westgate prevent this interior control weak spot? 11. The following petty cash transactions of Lexite Laminated Surfaces took place in August: Requirement R1. Make journal entries without explanations. 12.

Gwen O’Malley, a los angeles accountant for Ireland Limited, finds out that her supervisor, Blarney Stone, made several problems last year. Overall, the errors overstated the company’s net income by 20%. It is not clear whether or not the errors were deliberate or accidental. Requirement R1. What should O’Malley do? 13. The following things could show on a traditional bank reconciliation: Necessity R1. Classify each item as (1) an addition to the book balance, (2) a subtraction from the publication balance, (3) an addition to the bank stability, or (4) a subtraction from the lender balance. 2 14. Louise’s Dance Facility created a one hundred dollar imprest petty cash fund.

During the month, the fund custodian official and fixed petty money tickets the following: Requirement R1. Make the standard journal records to a. produce the petty cash fund and b. record the replenishment. Profit the finance totals $15, so $12 is lacking. Include explanations. 15. Each one of the following situations has an internal control weak spot. Requirements R1. Identify the missing inside control qualities in each situation. R2. Identify the possible trouble caused by every single control some weakness. R3. Suggest a solution with each internal control problem. 18. The Apr cash information of Donald Insurance follow:

Donald Insurance’s Cash account shows an equilibrium of $17, 040 in April 35. On Apr 30, Donald Insurance received the following traditional bank statement: three or more Additional info for the financial institution reconciliation: Requirements R1. Make the bank reconciliation of Jesse Insurance at April 35, 2011. R2. Journalize virtually any required items from the financial institution reconciliation. 17. On Nov 1, Ok Salad Dressings provides an impressive petty money fund with an imprest balance of $400. During November, Sun-drenched Lewis, the fund custodian, signs the following petty funds tickets: On November 30, prior to renewal, the finance contains these tickets as well as cash of $245.

The accounts troubled by petty money payments will be Office products expense, Travel around expense, Delivery expense, Entertainment expense, and Inventory. Requirements R1. Explain the characteristics and the internal control features of a great imprest finance. R2. In November 35, how much cash should the petty money fund keep before it truly is replenished? R3. Journalize all required articles to create the fund and replenish it. Include answers. R4. Associated with December you entry to boost the account balance to $450. Contain an explanation, and briefly explain what the custodian does. 4

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