Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies, assignment help

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timer Asked: Mar 18th, 2017
account_balance_wallet $30

Question Description

Purpose of Assignment

Reconciling bank accounts is a good way to help maintain internal controls over cash. With time lags and posting errors it is easy for cash transactions to be omitted, recorded in a different accounting period, or reflect incorrect amounts. This assignment with give you practical experience in reconciling the cash balance as noted on the company books to the bank's records.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Scenario: Daisey Company is a very profitable small business. It has not, however given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and book-keeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.

The balance per the bank statement on October 31, 2017, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for $253.25, No. 862 for $190.71, No. 863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25.

This memorandum has not been recorded by Daisey.

The company's ledger showed one Cash account with a balance of $21,877.72. The balance included undepositied cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash:

Cash balance per books, October 31 $21,877.72
Add: Outstanding checks
No. 862$190.71
No. 863226.80
No. 864165.28482.79
22,360.51
Less: Undeposited receipts 3,795.51
Unadjusted balance per bank, October 31 18,565.00
Less: Bank credit memorandum 185.00
Cash balance per bank statement, October 31 $18,380.00

Prepare a 1,050-word bank reconciliation report (hint: deduct the amount of the theft from the adjusted balance per books) including the following:

  • Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method.
  • What principles of internal control were violated in this case?

Show all work in the Excel® spreadsheet and submit with the reconciliation report.

Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies Grading Guide ACC/290 Version 7 Principles of Accounting I Copyright Copyright © 2017, 2015, 2014, 2013, 2012, 2011 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Edited in accordance with University of Phoenix® editorial standards and practices. Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies Grading Guide ACC/290 Version 7 Individual Assignment: Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies Purpose of Assignment Reconciling bank accounts is a good way to help maintain internal controls over cash. With time lags and posting errors it is easy for cash transactions to be omitted, recorded in a different accounting period, or reflect incorrect amounts. This assignment with give you practical experience in reconciling the cash balance as noted on the company books to the bank’s records. Resources Required Financial Accounting: Tools for Business Decision Making. Grading Guide Content Prepared a bank reconciliation report (hint: deduct the amount of the theft from the adjusted balance per books) including the following: • • Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method. What principles of internal control were violated in this case? Report was based on the following scenario: Daisey Company is a very profitable small business. It has not, however given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2017, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for @253.25, No. 862 for $190.71, No.863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the Met Partially Met Not Met Comments: 2 Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies Grading Guide ACC/290 Version 7 Content Met Partially Met Not Met Total Available Total Earned 5 #/5 Partially Met Not Met Comments: collection of a note receivable for Daisey Company by the bank on October 25. This memorandum has not been recorded by Daisey. The company’s ledger showed one Cash account with a balance of $21,877.72. The balance included undepositied cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash. The bank reconciliation report was 1,050 words in length. Writing Guidelines The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. Intellectual property is recognized with in-text citations and a reference page. Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. Sentences are complete, clear, and concise. Rules of grammar and usage are followed Met Comments: 3 Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies Grading Guide ACC/290 Version 7 Writing Guidelines Met Partially Met Not Met Total Available Total Earned 3 #/3 8 #/8 including spelling and punctuation. Assignment Total Additional comments: # Comments: 4
Name Section Date Problem 7-6A Daisey Company (a) DAISEY COMPANY Bank Reconciliation October 31, 2017 No. Amount No. Amount (b) and (c) (b) (c) 418

Tutor Answer

Exellent_K
School: UC Berkeley

Attached.

A. Bank reconciliation
In the books of Daisey Company, there is the movement of cash in and out; all these transactions
should be recorded on a daily basis for a proper audit trail. The cashbook should correspond with
the bank daily recordings of the flow of cash in and out of the business account. Proper bank
reconciliation ensures that the daily companies transactions are captured in the cashbook are
therefore similar to those records kept by the bank. The balances of cashbook and business bank
account would be the same. The accounts clerk doing reconciliation should ensure that the
cashbook entries and balances held by the bank match. The bank keeps updated bank statement
and as the accounts clerk should keep reviewing on a daily basis to ensure up to date
reconciliation records. According to Daisey Company, proper reconciliation is when Bret Turrin
maintains updated records on a daily basis and follow the follow the below format.
Daisey Company
Bank
reconciliation
31-Oct
$
18,380
3795.51
22,175.51

Balance per bank statement
Plus: Undeposited receipts
Less: Outstanding checks
No
62
183
284
862
863
864
Adjusted balance per bank
Cash balance per books
Add: Bank credit memorandum
Adjusted balance per books (before
theft)
Less: Theft ($22,062.72 – $21,018.72)
Adjusted balance per books

140.7...

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Review

Anonymous
Goes above and beyond expectations !

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