Expert answer:Comprehensive Bank Reconciliation
Expert answer:Description and instruction for assignment is in document attached.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.
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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.
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. 863
226.80
No. 864
165.28 482.79
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.
Click the Assignment Files tab to submit your assignment.
Financial Accounting, Ch. 7: Fraud, Internal Control, and
Cash
Write at least 75 words for an answer for each question below.
When you have something that is valuable to you, action is taken to protect it, well, companies are
no different. Safe guarding company assets are a top priority to prevent theft and losses within the
company, and at the top of the list is cash. However, companies are not only responsible for
protecting their assets, they must also act to protect the trust investors and other stakeholders have
placed in management:
•
•
What level of internal controls is consider to be adequate in a company?
What are effective controls for cash and why are these controls considered to be effective?
Preparing Comprehensive Bank
Reconciliation with Theft and Internal
Control Deficiencies Grading Guide
ACC/290 Version 7
Principles of Accounting I
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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
…
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