Question : 169. The following data were gathered to use in reconciling the : 1239827

 

169. The following data were gathered to use in reconciling the bank account of Savannah Company: 

Balance per bank

             $16,750

Balance per company records

               16,125

Bank service charges

                      80

Deposit in transit

                 2,195

NSF check

                    950

Outstanding checks

                 3,850

 

 

What is the adjusted balance on the bank reconcilition? 

 

 

 

 

 

170. Match the following elements of internal control: 

1. Risk Assessment 

     overall attitude of management and employees 

  ____ 

2. Control Environment 

     identify, analyze and assess likeliness of vulnerabilities 

  ____ 

3. Monitoring 

     provides reasonable assurance that business goals will be achieved 

  ____ 

4. Information and Communication 

     used to locate weaknesses and improve controls 

  ____ 

5. Control Procedures 

     used by management for guiding operations and ensuring compliance with requirements 

  ____ 

 

171. List and define each of the five elements of internal control. 

 

 

 

 

 

172. Two features of internal control are presented in the following sections.  Each is followed by a list of four irregularities that occurred in processing data.  Identify the one irregularity from each list that would be discovered or prevented by the feature of internal control described. 

(a)

The sum of the balances of the accounts in the customers ledger is compared at the end of each month with the balance of the accounts receivable account in the general ledger by a person who has no responsibility for maintaining either the general ledger or the customers ledger.

 

 

 

 

(1)

Five hours of services were rendered but the customer was only billed for four hours.

 

(2)

A cash receipt of $750 was recorded correctly in the accounts receivable controlling account but was posted to the customers ledger as $75.

 

(3)

A bill for services rendered to Cole Co. was erroneously posted to the account of Coleman Co. in the customers ledger.

 

(4)

No entry was made in the accounting records for services rendered to a customer.

 

 

 

(b)

Both cash and credit charges for services rendered are recorded on prenumbered invoices. At the end of the day, all invoices are accounted for before the duplicate copies of the invoices are routed to the accounting department for entry into the accounts and the cash is sent to the cashier’s department for deposit.

 

 

 

 

(1)

Some charge customers complained that the monthly statements of account did not add all amounts correctly.

 

(2)

Some clerks used incorrect hourly rates in preparing invoices.

 

(3)

Some clerks destroyed duplicate copies of cash invoices and misappropriated the cash.

 

(4)

Some charge customers complained that the monthly statement of account did not indicate credits for payments made.