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.
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