Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control. The following are the steps one has to follow when receiving the checks made for the payment sent by mail: Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier. When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries. Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied. To identify: The internal control weakness

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Answer 1

Question

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

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Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,310 in assets to launch the business. On December 31, the company's records show the following items and amounts. Cash Accounts receivable $ 10,200 15,200 Office supplies 3,550 Land 45,990 Office equipment 18,310 Accounts payable Owner investments 84,310 8,740 Cash withdrawals by owner Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 2,340 15,200 3,910 7,350 790 610 Exercise 1-19 (Algo) Preparing a statement of owner's equity LO P2 Frnst Genculting Hint Jasmin Ernst Capitalon

Answer 2

Question

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Expert Solution & Answer

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Answer 3

Question

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Answer 6

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Answer 7

Chapter 7, Problem 7.27BP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Answer 8

Requirement 2:

To determine

To find: Recording of sales allowance

Answer 9

Requirement 2:

To determine

To find: Recording of sales allowance

Answer 10

Requirement 3:

To determine

To calculate: Total cash receipts

Answer 11

Requirement 3:

To determine

To calculate: Total cash receipts

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 7 - Prob. 1QC Ch. 7 - Prob. 2QC Ch. 7 - Prob. 3QC Ch. 7 - Prob. 4QC Ch. 7 - Prob. 5QC Ch. 7 - Prob. 6QC Ch. 7 - Prob. 7QC Ch. 7 - Prob. 8QC Ch. 7 - Prob. 9QC Ch. 7 - Prob. 10QC

Solution Summary: The author explains the process of maintaining cash receipts by mail helps the company to have strict internal control.

To find: Recording of sales allowance

To calculate: Total cash receipts

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Chapter 7 Solutions