Author Question: Two features of internal control are presented in the following sections. Each is followed by a list ... (Read 147 times)

cartlidgeashley

  • Hero Member
  • *****
  • Posts: 572
Two features of internal control are presented in the following sections. Each is followed by a list of fourirregularities that occurred in processing data. Identify the one irregularity from each list that would be discoveredor prevented by the feature of internal control described. (a) The sum of the balances of the accounts in the customer's ledger is compared at the end ofeach month with the balance of the accounts receivable account in the general ledger by aperson who has no responsibility for maintaining either the general ledger or the customer'sledger. (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 controllingaccount but was posted to the customer's ledger as 75. (3) A bill for services rendered to Cole Co was erroneously posted to the account ofColeman Co in the customer's 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 theinvoices are routed to the accounting department for entry into the accounts and the cash issent to the cashier's department for deposit. (1) Some charge customers complained that the monthly statements of account did notadd 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 notindicate credits for payments made.

Question 2

On October 15, Manx Company bought 400 shares of its own stock for 16 per share. On December 10, Manx Company sold all of the same shares on the market for 20 per share.
  Show how both of these transactions affect the accounting equation.
 
  Include both account titles and amounts.
   Shareholders' equity
  Assets Liabilities Contributed capital Retained earnings
 
  What will be an ideal response?



jaaaaaaa

  • Sr. Member
  • ****
  • Posts: 341
Answer to Question 1

(a) (2)
(b) (3)

Answer to Question 2

Shareholders' equity
Assets Liabilities Contributed capital Retained earnings
(6,400 ) Cash
8,000 Cash (6,400 ) Treasury stock
6,400 Treasury stock
1,600 Paid-in capital from
treasury stock transactions



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

More than 4.4billion prescriptions were dispensed within the United States in 2016.

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

Did you know?

There are actually 60 minerals, 16 vitamins, 12 essential amino acids, and three essential fatty acids that your body needs every day.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

For a complete list of videos, visit our video library