Charge Woods's account for $30 NSF check. After these four entries are recorded, the book balance of cash is adjusted to the correct amount of $1,845 (the adjusted book balance). The Cash T-account to the side shows the computation, where entries match the steps in Exhibit 8.7. Unadj. bal. Adj. bal. 1,845 30 Cash 1,405 485 0 23 8 ⑦ 30 Ethical Risk Cause for Alarm The Association of Certified Fraud Examiners (ACFE) reports that the primary factor contributing to fraud is the lack of internal controls (30%), followed by the override of existing controls (19%), lack of management review (18%), poor tone at the top (10%), and lack of competent oversight (8%). These findings highlight the impor- tance of internal controls over cash. Source: "Report to the Nations," ACFE.■ The following information is available to reconcile Gucci's book balance of cash with its bank statement cash balance as of December 31. a. The December 31 cash balance according to the accounting records is $1,610, and the bank statement cash balance for that date is $1,900. b. Gucci's December 31 daily cash receipts of $800 were placed in the bank's night depository on December 31 but do not appear on the December 31 bank statement. c. Gucci's comparison of canceled checks with its books shows three checks outstanding: No. 6242 for $200, No. 6273 for $400, and No. 6282 for $100. d. When the December checks are compared with entries in the accounting records, it is found that Check No. 6267 had been correctly drawn (taken from the bank) for $340 to pay for office supplies but was erroneously entered in the accounting records as $430. e. The bank statement shows the bank collected a note receivable and increased Gucci's account for $470. Gucci had not recorded this transaction before receiving the statement. f. The bank statement included an NSF check for $150 received from Prada Inc. in payment of its account. It also included a $20 charge for check printing. Gucci had not recorded these transactions before receiving the statement. Required 1. Prepare the bank reconciliation for this company as of December 31. 2. Prepare the journal entries to make Gucci's book balance of cash equal to the reconciled cash balance as of December 31. Do More: QS8-7, QS 8-8. 8-9, E 8-11, E 8-12, E 8-13, E 8-14, P 8-4, P 8-5 ec. 31 Chapter 8 Cash, Fraud, and Internal Control Solutions Part 1 Part 2 Bank statement balance... Add Deposit of Dec. 31. Deduct Outstanding Checks No. 6242.... $200 GUCCI Bank Reconciliation December 31 $1,900 Book balance... Add 800 2,700 Error (Ck. 6267). Collected note. 6273.... 400 6282.... 100 700 $2,000 Adjusted bank balance.......... Deduct NSF check Printing fee.. Adjusted book balance...... Dec. 31 Accounts Receivable-Prada Inc.......

Charge Woods's account for $30 NSF check. After these four entries are recorded, the book balance of cash is adjusted to the correct amount of $1,845 (the adjusted book balance). The Cash T-account to the side shows the computation, where entries match the steps in Exhibit 8.7. Unadj. bal. Adj. bal. 1,845 30 Cash 1,405 485 0 23 8 ⑦ 30 Ethical Risk Cause for Alarm The Association of Certified Fraud Examiners (ACFE) reports that the primary factor contributing to fraud is the lack of internal controls (30%), followed by the override of existing controls (19%), lack of management review (18%), poor tone at the top (10%), and lack of competent oversight (8%). These findings highlight the impor- tance of internal controls over cash. Source: "Report to the Nations," ACFE.■ The following information is available to reconcile Gucci's book balance of cash with its bank statement cash balance as of December 31. a. The December 31 cash balance according to the accounting records is $1,610, and the bank statement cash balance for that date is $1,900. b. Gucci's December 31 daily cash receipts of $800 were placed in the bank's night depository on December 31 but do not appear on the December 31 bank statement. c. Gucci's comparison of canceled checks with its books shows three checks outstanding: No. 6242 for $200, No. 6273 for $400, and No. 6282 for $100. d. When the December checks are compared with entries in the accounting records, it is found that Check No. 6267 had been correctly drawn (taken from the bank) for $340 to pay for office supplies but was erroneously entered in the accounting records as $430. e. The bank statement shows the bank collected a note receivable and increased Gucci's account for $470. Gucci had not recorded this transaction before receiving the statement. f. The bank statement included an NSF check for $150 received from Prada Inc. in payment of its account. It also included a $20 charge for check printing. Gucci had not recorded these transactions before receiving the statement. Required 1. Prepare the bank reconciliation for this company as of December 31. 2. Prepare the journal entries to make Gucci's book balance of cash equal to the reconciled cash balance as of December 31. Do More: QS8-7, QS 8-8. 8-9, E 8-11, E 8-12, E 8-13, E 8-14, P 8-4, P 8-5 ec. 31 Chapter 8 Cash, Fraud, and Internal Control Solutions Part 1 Part 2 Bank statement balance... Add Deposit of Dec. 31. Deduct Outstanding Checks No. 6242.... $200 GUCCI Bank Reconciliation December 31 $1,900 Book balance... Add 800 2,700 Error (Ck. 6267). Collected note. 6273.... 400 6282.... 100 700 $2,000 Adjusted bank balance.......... Deduct NSF check Printing fee.. Adjusted book balance...... Dec. 31 Accounts Receivable-Prada Inc.......

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter4: Operating Activities: Sales And Cash Receipts

Section: Chapter Questions

Problem 3.6C

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