Assignment Question(s) - Principles of Accounting

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SafeAssign Originality Report (Current Semester - الفصل الحالي)ACCT-101: Principles of Accounting 13927-D… • Assignment 2

%100Total Score: High riskMAJED AL BATAYAN Submission UUID: c6be8334-3346-252a-119a-f8ef999a93bc

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College of Administration and Finance Sciences

Assignment (2) Deadline: Saturday 6/11/2021 @ 23:59

Course Name: Principles of Accounting Student’s Name: Majed Ahmed Mohammed ALBatayan

Course Code: ACCT101 Student’s ID Number: 200011731

Semester: 1st CRN:13927

Academic Year: 1443 H

For Instructor’s Use only Instructor’s Name:

Students’ Grade: /5 Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY · The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. · Assignments submitted through email will not be accepted. · Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. · Students must mention question number clearly in their answer. · Late submission will NOT be accepted. · Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. · All answers must be typed using Times New Roman (size 12,

double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism. · Submissions without this cover page will NOT be accepted.

Assignment Question(s): (Marks 5) Q1. A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory.(2 marks)

January 1: Purchased 100 units at SAR10 per unit

February 5: Purchased 60 units at SAR 12 per unit

March 16: Sold 40 Units for SAR 16 per unit

1. Explain the four inventory valuation methods. 2. Prepare general journal entries to record the March 16 sale using the

I. FIFO inventory valuation method. II. LIFO inventory valuation method.

Q2. The office manager of ABC company has the authority to the whole financial operations. He authorizes activities, controls the company’s expenses, records the

company’s transactions, and rarely takes vacation. The owners of the company are happy with his work since the company is making a profit. You are giving the opportunity to ed- ucate the owners about the risk of not implementing internal control. What would be your advice? (2 marks)

Q3. At the end of the month, XYZ company’s bank statement is different from the cash book balance. How would the company do the bank reconciliation? (1mark)

Answer Q.1: 1. The inventory valuation methods are follows: a) Specific Identification Method: The method of inventory valuation assigns the real cost to an recognizable

unit of invention. b) FIFO Method: This method of inventory valuation undertakes that the prices of the first products bought are those charged to price of goods vended

when the firm really vends products. c) LIFO Method: It is the short form of last-in, first-out. This technique of inventory valuation adopts that the prices of the furthermost

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current acquisitions are the foremost costs priced to cost of goods vended when the corporation essentially trades the products (Jinping, 2017, May, p2584). d) Weighted

Average Method: This method of inventory valuation is way of estimate culmination inventory using a weighted average unit cost.

1) FIFO

General journal

Date Particulars DR CR

16-Mar Cash 640

Sales revenue

640

Cost of goods sold 400

Merchandise inventory

400

2) LIFO

General journal

Date Particulars DR CR

16-Mar Cash 640

Sales revenue

640

Cost of goods sold 480

Merchandise inventory

480

Answer Q.2: The absence of internal control would create the following risks for the owners and the company. Higher risk of fraud and errors-Not having internal

control can allow one employee or more to exploit the company's resources and assets for personal use. They can use the company's funds for personal pleasures such as vaca- tion, purchasing items, etc. Activities such as embezzlement, accounting fraud can be eliminated if the work of employees is internally monitored and controlled by one another. Discrepancies in accounting and financial information-One person managing the whole financial and accounting information can have discrepancies that may lead to errors and disadvantages to the company. Internal controls such as auditing can make sure information is reliable and accurate in the book. Hence, errors can be found and eliminated via in- ternal control. Legal risks-In absence of internal control, The company is vulnerable to the violation of laws such as the Sarbanes-Oxley Act of 2002 and attracts lawsuits related to accounting frauds and scandals. This affects the reputation of the company in the eyes of its stakeholders and the public. By having internal control, financial reporting can be done in a legal manner. Hence reducing the chances of violation of laws and avoid lawsuits. Risk of Reducing operational efficiency-In absence of internal control, The company will suffer higher costs, the poor performance of employees, and errors that affect the company's assets. By having reliable and authentic information by internal control, It can be used to manage and assess the performance of employees promoting operational efficiency of the company.

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So, yes, The advice would be to implement internal control in the ABC company in order to mitigate or avoid the above risks.

Answer Q.3: The company can reconcile the balances by getting the bank records by taking the full list of credit and debit transactions form the bank to check the records in the business by checking the debit and credits transactions of the business. Another way is to check the deposits with the bank.

References

Jinping, L. (2017, May). Under the IT environment inventory accounting and management studies. In 2017 29th Chinese Control And Decision Conference (CCDC) (pp.2579-2583). IEEE.

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College of Administration and Finance Sciences Assignment (2) Deadline: Saturday 6/11/2021 @ 23:59

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College of Administration and Finance Sciences Assignment (2) Deadline Saturday 6/11/2021 @ 23:59

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Principles of Accounting Student’s Name:

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Principles of Accounting Student’s Name

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ACCT101 Student’s ID Number:

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ACCT101 Student’s ID Number

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1st CRN:13927

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1st CRN:13927

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For Instructor’s Use only Instructor’s Name:

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For Instructor’s Use only Instructor’s Name

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/5 Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY · The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. · Assignments submitted through email will not be accepted.

Original source

/5 Level of Marks High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY · The Assignment must be submitted on Blackboard (WORD format only) via allocated folder · Assignments submitted through email will not be accepted

Student paper

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. · Students must mention question number clearly in their answer. · Late submission will NOT be accepted.

Original source

· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation This includes filling your information on the cover page · Students must men- tion question number clearly in their answer · Late submission will NOT be accepted

Student paper

· Avoid plagiarism, the work should be in your own words, copying from students or other re- sources without proper referencing will result in ZERO marks.

Original source

· Avoid plagiarism, the work should be in your own words, copying from students or other re- sources without proper referencing will result in ZERO marks

Student paper

· All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism. · Submissions without this cover page will NOT be accepted. Assignment Question(s):

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· All answers must be typed using Times New Roman (size 12, double-spaced) font No pictures containing text will be accepted and will be considered plagiarism · Submissions without this cover page will NOT be accepted Assignment Question(s)

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(Marks 5) Q1. A company that uses a perpetual inventory system made the following cash pur- chases and sales. There was no beginning inventory.(2 marks)

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(Marks 5) Q1 A company that uses a perpetual inventory system made the following cash pur- chases and sales There was no beginning inventory.(2 marks)

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Purchased 100 units at SAR10 per unit

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Purchased 100 units at SAR10 per unit

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Purchased 60 units at SAR 12 per unit

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Purchased 60 units at SAR 12 per unit

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Sold 40 Units for SAR 16 per unit

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Sold 40 Units for SAR 16 per unit

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Explain the four inventory valuation methods.

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Explain the four inventory valuation methods

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Prepare general journal entries to record the March 16 sale using the

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Prepare general journal entries to record the March 16 sale using the

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FIFO inventory valuation method.

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FIFO inventory valuation method

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LIFO inventory valuation method.

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LIFO inventory valuation method

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The office manager of ABC company has the authority to the whole financial operations. He au- thorizes activities, controls the company’s expenses, records the company’s transactions, and rarely takes vacation. The owners of the company are happy with his work since the company is making a profit. You are giving the opportunity to educate the owners about the risk of not im- plementing internal control.

Original source

The office manager of ABC company has the authority to the whole financial operations He au- thorizes activities, controls the company’s expenses, records the company’s transactions, and rarely takes vacation The owners of the company are happy with his work since the company is making a profit You are giving the opportunity to educate the owners about the risk of not im- plementing internal control

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What would be your advice?

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What would be your advice

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At the end of the month, XYZ company’s bank statement is different from the cash book balance. How would the company do the bank reconciliation?

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At the end of the month, XYZ company’s bank statement is different from the cash book balance How would the company do the bank reconciliation

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(1mark) Answer Q.1:

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(1mark) Answer question 1

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The inventory valuation methods are follows:

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Four inventory valuation methods are

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a) Specific Identification Method:

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a) Specific Identification Method

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b) FIFO Method:

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b) FIFO Method

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c) LIFO Method:

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c) LIFO Method

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d) Weighted Average Method: This method of inventory valuation is way of estimate culmination inventory using a weighted average unit cost.

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d) Weighted Average Method The weighted-average method of inventory costing is a means of costing ending inventory using a weighted-average unit cost

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Date Particulars DR CR 16-Mar Cash 640

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Date Particulars Amt (Dr) Amt (Cr) 16th Mar Cash 640

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Cost of goods sold 400

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Cost of Goods Sold DR 400

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Date Particulars DR CR 16-Mar Cash 640

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Date Particulars Amt (Dr) Amt (Cr) 16th Mar Cash 640

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Cost of goods sold 480

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Cost of Goods Sold DR 480

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Answer Q.2:

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Answer question 2

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The absence of internal control would create the following risks for the owners and the company.

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(2 marks) For the owners and the firm, the absence of internal control would pose the following risks

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Higher risk of fraud and errors-Not having internal control can allow one employee or more to exploit the company's resources and assets for personal use. They can use the company's funds for personal pleasures such as vacation, purchasing items, etc. Activities such as embezzlement, accounting fraud can be eliminated if the work of employees is internally monitored and con- trolled by one another. Discrepancies in accounting and financial information-One person man- aging the whole financial and accounting information can have discrepancies that may lead to errors and disadvantages to the company.

Original source

The absence of internal control would create the following risks for the owners and the com- pany- Higher risk of fraud and errors- Not having internal control can allow one employee or more to exploit the company's resources and assets for personal use They can use the company's funds for personal pleasures such as vacation, purchasing items, etc Activities such as embezzlement, accounting fraud can be eliminated if the work of employees is internally monitored and controlled by one another Discrepancies in accounting and financial information- One person managing the whole financial and accounting information can have discrepancies that may lead to errors and disadvantages to the company

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Internal controls such as auditing can make sure information is reliable and accurate in the book. Hence, errors can be found and eliminated via internal control. Legal risks-In absence of internal control, The company is vulnerable to the violation of laws such as the Sarbanes-Oxley Act of 2002 and attracts lawsuits related to accounting frauds and scandals. This affects the rep- utation of the company in the eyes of its stakeholders and the public.

Original source

Internal controls such as auditing can make sure information is reliable and accurate in the books Hence, errors can be found and eliminated via internal control Legal risks- In absence of internal control, the company is vulnerable to the violation of laws such as the Sarbanes-Oxley Act of 2002 and attracts lawsuits related to accounting frauds and scandals This affects the repu- tation of the company in the eyes of its stakeholders and the public

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By having internal control, financial reporting can be done in a legal manner. Hence reducing the chances of violation of laws and avoid lawsuits. Risk of Reducing operational efficiency-In ab- sence of internal control, The company will suffer higher costs, the poor performance of employ- ees, and errors that affect the company's assets. By having reliable and authentic information by internal control, It can be used to manage and assess the performance of employees promoting operational efficiency of the company.

Original source

By having internal control, financial reporting can be done in a legal manner Hence reducing the chances of violation of laws and avoid lawsuits Risk of Reducing operational efficiency- In ab- sence of internal control, the company will suffer higher costs, the poor performance of employ- ees, and errors that affect the company's assets By having reliable and authentic information by internal control, it can be used to manage and assess the performance of employees promoting operational efficiency of the company

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So, yes, The advice would be to implement internal control in the ABC company in order to miti- gate or avoid the above risks.

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So, yes, the advice would be to implement internal control in the ABC company in order to miti- gate or avoid the above risks

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Another way is to check the deposits with the bank.

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Check the deposits with the bank