Homework Solutions2

Homework Solutions2 - ACCT 2101 Solutions to Homework...

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Unformatted text preview: ACCT 2101 Solutions to Homework Problems EXERCISE 7-3 (a) (b) Procedure Weakness Principle Violated Recommended Change 1. Cashiers are not bonded. Other controls. All cashiers should be bonded. 2. Inability to establish responsibility for cash on a specific clerk. Establishment of responsibility. There should be separate cash drawers and register codes for each clerk. 3. Cash is not adequately protected from theft. Physical, mechanical, and electronic controls. Cash should be stored in a safe until it is deposited in bank. 4. Cash is not independently counted. Independent internal verification. A cashier office supervisor should count cash, and reconcile the total to the cash register tape. 5. The accountant should not handle cash. Segregation of duties. The cashiers department should make the deposits. 10-1 PROBLEM 7-4A (a) KINGSTON COMPANY Bank Reconciliation November 30, 2007 Balance per bank statement.............................................. $17,851.60 Add: Deposits in transit................................................... 1,218.00 19,069.60 Less: Outstanding checks No. 2451............................................................. $1,260.40 No. 2472............................................................. 426.80 No. 2478............................................................. 538.20 No. 2482............................................................. 612.00 No. 2484............................................................. 829.50 No. 2485............................................................. 974.80 No. 2486............................................................. 900.00 No. 2488............................................................. 800.00 6,341.70 Adjusted cash balance per bank....................................... $12,727.90 Balance per books.............................................................. $11,126.90 Add: Note collected by bank........................................... 1,875.00 ($1,800 + $90 $15) 13,001.90 Less: Check printing charge............................................ $ 85.00 Error in recording check No. 2479 ($1,750 $1,570)................................ 180.00 Error in 11-21 deposit ($2,954 $2,945)............................................... 9.00 274.00 Adjusted cash balance per books..................................... $12,727.90 (b) Nov. 30Cash 1,875 Miscellaneous Expense............................... 15 Notes Receivable................................ 1,800 Interest Revenue................................ 90 30 Miscellaneous Expense............................... 85 Cash..................................................... 85 Nov. 30 Accounts Payable...................................................... 180 Cash.................................................................. 180 30 Accounts Receivable................................................. 9 10-2 Cash.................................................................. 9 EXERCISE 8-7 Nov. 1...
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Homework Solutions2 - ACCT 2101 Solutions to Homework...

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