Hazel in the process of monitoring store activities

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Hazel, in the process of monitoring store activities, may notice if a sale is not rung up.Third, Hazel hires bonded employees who are experienced. Fourth, Hazel provides train-ing in procedures. These procedures are no guarantee, but they lessen the risk of loss ofcash in the cashier function.
P4. Bank Reconciliation1.Sedona, Inc.Bank ReconciliationMay 31, 2014Balance per bank, May 31, 2014$52,351.46Add:Deposit in transit$ 5,220.94Check of another company mistakenlydeducted by bank850.006,070.94$58,422.40Less outstanding checks3,936.80Adjusted bank balance, May 31, 2014$54,485.60Balance per books, May 31, 2014$42,754.16Add:Note receivable collected by bank$12,000.00Interest on note collected by bank360.00Interest on average balance120.0012,480.00$55,234.16Less:Check recorded incorrectly in check register$540.00Bank service charge25.00NSF check of Eva Mendez183.56748.56Adjusted book balance, May 31, 2014$54,485.602.2014May31 Cash12,360.00Notes Receivable12,000.00Interest Income360.00Note and interest collected by bank31 Cash120.00
Interest Income120.00Interest on average bank accountbalance31Purchases or Merchandise Inventory540.00Cash540.00To correct an incorrect entry forpurchase of merchandise$1,920 – $1,380 = $54031Bank Service Charges Expense25.00Cash25.00Bank service charge for May31Accounts Receivable183.56Cash183.56NSF check of Eva Mendez returnedby bank3.The adjusted cash balance of $54,485.60 should appear on the balance sheet.P4.BankReconciliation4.A bankreconciliationis anecessary internal control because eventsanditems suchasnotes receivable collectedby thebank, interest incomeonnotes, interest income,overstatementofdeposits, collectionfees, NSFchecks,andservice charges,whichareunknownoninternal book records, mustbeupdated to reflect currentdata.Asanoutside record,the bankstatement providesacheckon theinternalaccountingrecordsof thecompanyandprovesthat all cashtransactionshave beenrecorded.

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Term
Fall
Professor
THOMAS
Tags
Accounting, Balance Sheet, Cheque, Generally Accepted Accounting Principles

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