Description
Q1-
A company wants to implement good internal control. What are the policies and procedures you can suggest to minimize human frauds and errors?
Q2-
Assume that you have a company. And the management team estimates that 3% of sales will be uncollectible.
Give any amount of sales and prepare the journal entry using the percent of sales method.
A company that uses a perpetual inventory system made the following cash purchases and sales.There was no beginning inventory.
January 1: | Purchased 30 units at SAR11 per unit |
February 5: | Purchased 30 units at SAR 13 per unit |
March 16: | Sold 50 Units for SAR 15 per unit |
A. Prepare general journal entries to record the March 16 sale using the
B. What is the cost of goods sold and the gross margin for each method?
Q4. What is the bank reconciliation? why is it important for companies to prepare bank reconciliation periodically?
Explanation & Answer
Attached.
1
RNNING HEAD: ACCOUNTING
Student Name:
Professor’s Name:
Course:
Date:
Title:Accounting
RNNING HEAD: ACCOUNTING
2
Assignment Questions
Q1- A company wants to implement good internal control. What are the policies
and procedures you can suggest to minimize human frauds and errors? (1Mark)
A company’s good internal controls will ensure an entity achieves its set
goals. They ensure efficient operation, protect employees, and safeguard assets within
the company. Furthermore, good controls will provide a good platform for accurate
reporting of financial reports and compliance with set rules and regulations (Kim,
2018). Here are the policies that can mitigate errors and fraud.
a) Risk assessment: The company needs to evaluate how the business operates and
the risk it is exposed to. Risk assessments are done as a routine to prevent future
frauds from occurring
b) Control of activities: policies and frameworks shall ensure segregation of duties
and allow approvals for each function.
c) There should be clear communication from top management to employees and
vis versa.
d) Monitoring: routine monitoring ensures the internal control works properly. This
is usually done by management and other supervisors.
e) Frequent reconciliation on the accounting statements needs to be done to allow
detect any error or possibility of fraud.
3
RNNING HEAD: ACCOUNTING
f)
Ensuring the account systems have access controls to specific individuals. This
reduces the possibility of anyone accessing them and giving the responsibility to
a few individuals.
g) The company can opt to rotate job functions between employees. This can reduce
the level of risk and fraud likely to happen within the company.
Q2-Assume that you have a company. And the management team estimates that
3% of sales will be uncollectible.
Give any amount of sales and prepare the journal entry using the percent of
sales method. (1Mark)
Assuming sales for last month were $ 200,000.
Uncollectible sales shall be = 3% * 200,000 = $ 6,000
To record estimate of uncollectible sales
Date
Type of account
Debit
January 31
Bad Debts expense
6,00...