Concept Introduction:
Morals are judgments, standards, and rules of good conduct in the society. They guide people toward permissible behavior with regard to basic values.
Bank Reconciliation:
Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares
To Indicate:
If controller's behavior is professional or not
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Chapter 5 Solutions
Survey of Accounting (Accounting I)
- Question 32 Which of the following is LEAST indicative of fraudulent activity. Numerous cash refunds made to different people at the same PO box. Several credit memos cannot be located to support reductions in customers' balances. Bank reconciliation has no outstanding checks or deposits in transit older than fifteen days. Three people were absent the day the auditors handed out paychecks and these checks were not picked up until four weeks later.arrow_forwardListed below are seven errors or problems that might occur in the processing of cash transactions. Also shown is a list of internal control principles. Evaluate each possible error and cite a principle that is listed that would reduce the probability of the error occurring. If none of the principles given will correct the problem, write "None." If you think more than one principle is appropriate, list all principles that apply. Internal Control Principles Establishment of responsibility Segregation of duties Physical control devices Documentation procedures e. Independent internal verification a. b. C. d. f. Human resource controlsarrow_forwardQuestion: The following errors were found when the controller at Mountain Motel was doing the June 30 bank reconciliation. On June 25, the bank posted a cheque in the amount of $825 to Mountain’s bank account. The cheque had been written by another company, Mountainside Company. For each of these errors, (a) indicate if and how it would be shown on the bank reconciliation, and (b) prepare the journal entry for Mountain if required. Please explain for the answer.arrow_forward
- Problem 5- The bank statement and relevant portions of Bernie Company's cash records for the month ended June 30, 2023 are given below. Note that Cheque # 887 was recorded incorrectly by the bookkeeper for office supplies purchase. Cheque # 891 was recorded incorrectly by the bank. Prepare a bank reconciliation, in proper format, on the next page. Record the required reconciliation entrie you detach the page, please write your name on the page.arrow_forwardPart 1: Prepare a bank reconciliation for may. Part 2: 1. Record the interest of $110 receipt from the bank. 2. Record the return of the customer check of $260 due to insufficient funds. 3. Record the service charges of $70 deducted by the bank. Part 3: 1. After the reconciliation journal entries are posted what balance will be reflected in the cash amount in the ledger? 2.  4. If the company also has $60 of petty cash on hand, which is recorded in a different account called Petty Cash on Hand, what totall amount of Cash and Cash Equivalents should be reported on the balance sheet at the end of May?arrow_forwardProblem 9.5A (Static) Correcting errors revealed by a bank reconciliation. LO 9-5, 9-6 During the bank reconciliation process at Fontes & Barone Consulting, LLP, on May 2, 20X1, the following two errors were discovered in the firm’s records. The checkbook and the general journal indicated that Check 2206 dated April 17 was issued for $696 to make a cash purchase of supplies. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $96. The checkbook and the general journal indicated that Check 2247 dated April 20 was issued for $140 to pay a utility bill. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $410. Required: Prepare the adjusted book balance section of the firm’s bank reconciliation statement as of April 30, 20X1. The book balance as of April 30 was $25,275. The errors listed above are the only two items that affect…arrow_forward
- Problem 1 of 2: Using the following information, prepare a bank reconciliation for the end of September. Bank balance (September 30): $6,988 Book balance (September 30): $6,626 • Deposits in transit: $1,600 Outstanding checks: $599 and $1,423 Bank charges: $75 Bank incorrectly charged the account $75. The bank will correct the error next month. Check number 2456 correctly cleared the bank in the amount of $234 but posted in the accounting records as $324. This check was expensed to Utilities Expense. Record your responses in the shaded boxes below (blue boxes are for descriptions and orange boxes are for dollar amounts): ----- Bank statement balance at September 30: Add: Deposit in transit Bank error Book balance at September 30: Add: 6988 6626 1600 Check Error 90 75 Less: Less: Outstanding checks Adjusted bank balance 2022 Bank service Charge 75 6641 Adjusted book balance 6641 Problem 2 of 2: Record the journal entries that are necessary after completing the bank reconciliation…arrow_forwardDuring the preparation of the bank reconciliation for Building Concepts Co., Joel Knolls, the assistant controller, discovered that Lone Peak National Bank incorrectly recorded a $3,290 check written by Building Concepts Co. as $329. Joel has decided not to notify the bank but wait for the bank to detect the error. Joel plans to record the $2,961 error as Other Income if the bank fails to detect the error within the next three months.Discuss whether Joel is behaving in a professional manner.arrow_forwardXYZ LLC dealing all its transactions through its bank to avoid employee fraud and theft. For offering daily services,the bank debited OMR 20 to the bank account and the company unaware it.How will you adjust the above reconciliation item in bank reconciliation statement? a. Add OMR 20 to the company's bank statement balance b. Add OMR 20 to the company's cash book balance c. Deduct OMR 20 from company's cash book balance d. Deduct OMR 20 from the company's cash book balancearrow_forward
- 5 While preparing the bank reconciliation for March, the accountant for Bertran Industries discovered that a $649 check in payment of an account payable had been entered incorrectly in the journal as $694. Which of the following is true? Multiple Choice An adjusting entry must be made to debit Cash and credit Accounts Payable for $45. An adjusting entry must be made to debit Accounts Payable and credit Cash for $45. The bank should be notified, and the bank should correct its records by adding $45 to the company's account. No entry is needed for the reconciling item because it appears on the bank's side of the reconciliation.arrow_forwardProblem 9.5A (Static) Correcting errors revealed by a bank reconciliation. LO 9-5, 9-6 During the bank reconciliation process at Fontes & Barone Consulting, LLP, on May 2, 20X1, the following two errors were discovered in the firm's records. a. The checkbook and the general journal indicated that Check 2206 dated April 17 was issued for $696 to make a cash purchase of supplies. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $96. b. The checkbook and the general journal indicated that Check 2247 dated April 20 was issued for $140 to pay a utility bill. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $410. Required: 1. Prepare the adjusted book balance section of the firm's bank reconciliation statement as of April 30, 20X1. The book balance as of April 30 was $25,275. The errors listed above are the only two items that affect…arrow_forwardprepare journal entries for this The following errors were found when the controller at Crane Hotel was doing the March 31 bank reconciliation. 1. 2. 3. On March 5, Crane recorded a payment of an account payable as $2,710. The correct amount was $1,270. It was correctly recorded by the bank. On March 19, Crane recorded a deposit as $2,820. The correct amount was $4,280. The deposit was for the collection of an account receivable and the bank recorded it correctly. On March 31, the bank recorded a deposit as $5,610. The correct amount was $2,650. This error was corrected by the bank on April 1. Crane had correctly recorded the deposit. For each of these errors indicate if and how it would be shown on the bank reconciliation. 1. 2. 3. $ $ +Aarrow_forward
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