Ruby CpaMba- Wiley Plus Exercise 8 Accounting
LBM2014
brief_exercise_8.docx|
Brief Exercise 8-1 |
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Match each situation with the fraud triangle factor—opportunity, financial pressure, or rationalization—that best describes it.
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An employee’s monthly credit card payments are nearly 75% of his or her monthly earnings. |
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An employee earns minimum wage at a firm that has reported record earnings for each of the last five years. |
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An employee has an expensive gambling habit. |
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An employee has check-writing and -signing responsibilities for a small company, as well as reconciling the bank account. |
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Brief Exercise 8-6 |
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The cash register tape for Bluestem Industries reported sales of $6,871.50. Record the journal entry that would be necessary for each of the following situations. (a) Cash to be accounted for exceeds cash on hand by $50.75. (b) Cash on hand exceeds cash to be accounted for by $28.32. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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No. |
Account Titles and Explanation |
Debit |
Credit |
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(a) |
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(b) |
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Brief Exercise 8-9 |
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On March 20, Dody’s petty cash fund of $100 is replenished when the fund contains $9 in cash and receipts for postage $52, freight-out $26, and travel expense $10. Prepare the journal entry to record the replenishment of the petty cash fund. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Date |
Account Titles and Explanation |
Debit |
Credit |
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Mar. 20 |
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Brief Exercise 8-13 |
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At July 31, Ramirez Company has the following bank information: cash balance per bank $7,420, outstanding checks $762, deposits in transit $1,620, and a bank service charge $20. Determine the adjusted cash balance per bank at July 31.
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The adjusted cash balance per bank |
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Exercise 8-3 |
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The following control procedures are used in Mendy Lang’s Boutique Shoppe for cash disbursements.
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(a) |
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For each procedure, explain the weakness in internal control, and identify the internal control principle that is violated. |
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(b) |
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For each weakness, suggest a change in the procedure that will result in good internal control. |
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The company accountant prepares the bank reconciliation and reports any discrepancies to the owner. |
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(a) |
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Weakness: |
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Principle: |
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(b) |
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Recommended Change: |
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The store manager personally approves all payments before signing and issuing checks. |
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(a) |
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Weakness: |
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Principle: |
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(b) |
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Recommended Change: |
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3. |
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Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. |
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(a) |
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Weakness: |
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Principle: |
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(b) |
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Recommended Change: |
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After payment, bills are filed in a paid invoice folder. |
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(a) |
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Weakness: |
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Principle: |
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(b) |
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Recommended Change: |
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5. |
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The company checks are unnumbered. |
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Weakness: |
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Principle: |
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(b) |
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Recommended Change: |
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Warning
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Don't show me this message again for the assignment |
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Click if you would like to Show Work for this question: |
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Exercise 8-5 |
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Listed below are five procedures followed by Eikenberry Company.
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Several individuals operate the cash register using the same register drawer. |
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A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. |
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Joe Cockrell writes checks and also records cash payment journal entries. |
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One individual orders inventory, while a different individual authorizes payments. |
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Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. |
Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated.
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Procedure |
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IC Good or Weak? |
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Related Internal Control Principle |
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1. |
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2. |
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3. |
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4. |
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5. |
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Warning
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Exercise 8-7 |
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Setterstrom Company established a petty cash fund on May 1, cashing a check for $100.00. The company reimbursed the fund on June 1 and July 1 with the following results.
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June 1: Cash in fund $1.75. |
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Receipts: delivery expense $31.25; postage expense $39.00; and miscellaneous expense $25.00. |
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July 1: Cash in fund $3.25. |
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Receipts: delivery expense $21.00; entertainment expense $51.00; and miscellaneous expense $24.75. |
On July 10, Setterstrom increased the fund from $100.00 to $130.00. Prepare journal entries for Setterstrom Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Date |
Account Titles and Explanation |
Debit |
Credit |
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May 1 |
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June 1 |
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July 1 |
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July 10 |
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