➢ Name several control documents used in merchandise transactions. A review of the deposit slips with the bank statement showed that a deposit for $ 2,250 of a company with a similar account number had been credited to the Hughes Company account in error. ... More. Comparison of the canceled checks with the check register revealed that one check in the amount as $ 1,458 had been recorded in the books as $ 1,539. Tiffany wrote these checks in July: The cash balance per the ledger on 2010 July 31, was $ 30,766.37. Bank service charges for October are $ 14. 318 for $ 14.20 delivery expense was prepared and paid. Prepare a bank reconciliation as of 2010 July 31, and any necessary journal entry or entries to correct the accounts. A company reports net income of $15,000, net sales of $32,000, total assets of $51,000, and total equity of $21,000. No entry has been made to reflect the returned check on the company records. In 2016, Adams Company reported a return on assets of 16 percent and an asset turnover of 1.5. Complete, accurate, and up-to-date accounting records should be maintained. In 2017, the company reported a return on assets of 20 percent but an asset turnover of only 1.1. The use of check protectors, cash registers, and time clocks is recommended. You reported that the office manager-bookkeeper-cashier-sales manager had been misappropriating funds and had been using a variety of schemes to cover his actions. Start studying Financial Accounting Chapter 4. A. ➢ Explain how transfer bank accounts can help bring about effective cash management. On one weekend, he traveled to some neighboring cities and mailed invoices made out to the company for which he worked. The purposes of internal control are to check the accuracy of accounting data, safeguard assets against theft, promote efficiency of operations, and ensure that management’s policies are being followed. Presented below are selected ratios derived from Tropical Cafe's financial statements: If a company with a current ratio of 2.3 pays $7,000 of its salaries payable, its current ratio will: The following data is provided for Barrel Company: Presented below are select financial data from Leahy Inc.'s annual report: Leahy, Inc.'s receivable turnover improved from Year 1 to Year 2. An examination of the cash receipts and the deposit tickets revealed that the bookkeeper erroneously recorded a check from a customer, C. Parker, of $ 1,458 as $ 1,944. During May, the bank credited Hughes Company with the proceeds, $ 6,795, of a note which it had collected for the company. The following transactions occurred in December: Dec. 2 The petty cash fund was increased to $ 1,350. What is the purpose of this statement? Visit the Securities and Exchange website and find the EDGAR database at: EDGAR stands for the Electronic Data Gathering, Analysis, and Retrieval system. Broadly speaking, an internal control structure is only necessary in large organizations. Hughes Company had not recorded the payment of this note. As it pertains to incomplete data as a limitation of financial statement analysis, which of the following describes the concept of conservatism? Stolen petty cash funds by drawing false vouchers purporting to cover a variety of expenses incurred. D. Benchmarking involves comparing a company's ratios over time. Remember that this small company had limited financial resources. ➢ What types of items cause the balance per ledger and the balance per bank statement to disagree? The bank deducted one of Irish’s checks as $ 20,250 instead of the correct amount of $ 2,025. Balance per bank statement, 2010 October 31, Proceeds of a note collected by bank not yet entered in, Bank service charges not yet entered by Reed Company, Flowers for hospitalized employee (miscellaneous expense). Checks 3678, 3679, and 3680 also cleared the bank. After browsing the site write a one page memo as to what you learned about internal audit. Although his business seemed profitable, there was a shortage of cash. Which one of the following is not one of the components into which ROE is normally decomposed? 22 When the fund had a cash amount of $ 31.35, the custodian of the fund was reimbursed for expenditures made, including: 30 The fund was reimbursed to include petty cash items in the financial statement prepared for the fiscal year ending on this date. Which account is normally used for this purpose when excess cash is produced from operations and why? Prepare any journal entry or entries needed at 2010 July 31. B. Answers Chapter 4 Quiz - Free download as Word Doc (.doc / .docx), PDF File (.pdf), Text File (.txt) or read online for free.