Identify, from the above scenario, the risks and control objectives relating to cash. State the controls needed to deal with the identified risks.
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1.
- Jane is a cashier at Lulu Ltd a fast-food outlet in Kang. She receives a lot of cash from customers for cash sales. Serving a lot of customers each time makes it difficult for her to record cash promptly. Her cousin does the banking of cash on her behalf every Saturday. Sunday is her resting day. She sometimes asks her brother, who is doing a certificate in accounting at a local college, to help her with bank reconciliation. As she is not familiar with accounting, she normally files the bank reconciliation without questions.
- Identify, from the above scenario, the risks and control objectives relating to cash.
- State the controls needed to deal with the identified risks.
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- Al Kamyani have business in Nizwa, Oman. The business was maintaining only one Cash account. The Chief accountant used to make all the Cash payments. As the business grew the number of cash payment of small amounts increased and it became difficult for the Chief Accountant to maintain the cash account. On 1st September 2021 The Chief Accountant started a Petty cash fund and appointed you as a petty cashier. He gave a cheque for RO 600 to keep as Petty cash fund. During the month of September the receipts were RO 150 petrol, RO 90 office stationery, RO 160 staff welfare and RO 60 travelling and there was RO 125 left in the petty cash box. In the month of October the receipts were RO 135 petrol, RO 75 office stationery, RO 185 staff welfare and RO 75 travelling and there was RO 150 left in the petty cash box. The fund amount was raised to RO 700 from the end of the month. You are required to answer the below questions based on the above case The shortage or overage in the petty cash…Al Kamyani have business in Nizwa, Oman. The business was maintaining only one Cash account. The Chief accountant used to make all the Cash payments. As the business grew the number of cash payment of small amounts increased and it became difficult for the Chief Accountant to maintain the cash account. On 1st September 2021 The Chief Accountant started a Petty cash fund and appointed you as a petty cashier. He gave a cheque for RO 600 to keep as Petty cash fund. During the month of September the receipts were RO 150 petrol, RO 90 office stationery, RO 160 staff welfare and RO 60 travelling and there was RO 125 left in the petty cash box. In the month of October the receipts were RO 135 petrol, RO 75 office stationery, RO 185 staff welfare and RO 75 travelling and there was RO 150 left in the petty cash box. The fund amount was raised to RO 700 from the end of the month. You are required to answer the below questions based on the above case The amount required to refill the fund in…Your cousin works in the accounting department of his Company. You are at a family get together and he says he hates this part of his job where he has to reconcile the bank statements every month. He says "I don't understand why this is necessary. Almost all our customers pay online and the bank tracks all the ins and outs of the cash in the account. I think these bank reconciliations are a waste of time!" You think that you don't really reconcile your checking account every 1. Name at least three benefits achieved by performing a bank reconciliation that you could share with your cousin.
- Harriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients' accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient's check-in Dr. Conrad's name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money. 1. Who is the best person in Dr. Conrad's…Harriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients’ accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient’s check in Dr. Conrad’s name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer’s account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money. Required 1. Who is the best person in Dr.…Southern Company pays its employees weekly by issuing checks on its regular bank account. The owner thinks it would be too much trouble to have a second checking account. Explain to the owner why having this account might be worth the additional effort.
- Steve Ramos owns apartment buildings in Baguio City, and Tagaytay City. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to Ramos monthly and prepare their own bank reconciliations. The manager in Baguio City has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than Ramos actually has in the bank. In negotiating the sale of the Baguio City property, Ramos is showing the balance sheet to prospective investors. Based on Case 3, identify two parties other than Ramos who can be harmed by this theft. In what ways can they be harmed?Steve Ramos owns apartment buildings in Baguio City, and Tagaytay City. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to Ramos monthly and prepare their own bank reconciliations. The manager in Baguio City has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than Ramos actually has in the bank. In negotiating the sale of the Baguio City property, Ramos is showing the balance sheet to prospective investors. 1. Identify two parties other than Ramos who can be harmed by this theft. In what ways can they be harmed? 2. Discuss the role accounting plays in this situation.Natalie decides that she cannot afford to hire John to do her accounting. One way thatshe can ensure that her cash account does not have any errors and is accurate and upto-date is to prepare a bank reconciliation at the end of each month.Natalie would like you to help her. She asks you to prepare a bank reconciliation forJune 2020 using the following information.
- Natalie decides that she cannot afford to hire John to do her accounting. One way that she can ensure that her cash account does not have any errors and is accurate and up-to-date is to prepare a bank reconciliation at the end of each month.Natalie would like you to help her. She asks you to prepare a bank reconciliation for June 2021 using the following information. GENERAL LEDGER—COOKIE CREATIONS INC. Cash Date Explanation Ref Debit Credit Balance 2021 June 1 Balance 2,657 1 750 3,407 3 Check #600 625 2,782 3 Check #601 95 2,687 8 Check #602 56 2,631 9 1,050 3,681 13 Check #603 425 3,256 20 155 3,411 28 Check #604 297 3,114 28 110 3,224 PREMIER BANKStatement of Account—Cookie Creations Inc.June 30, 2021 Date Explanation Checks and…Jeannette's Innovative Networking Express aka JINX has the following occurrences: Having just completed Professor Hirt’s ACNT 1303 course, Jeannette decides to set up a Petty Cash fund in the amount of $100 to be able to pay cash for/reimburse ordinary but small (in amount) business expenses. She writes a check and takes it to the bank to cash it to get change and small denominations of currency. After its third day in existence, the Petty Cash fund has dwindled in amount and has receipts for cash payments issued from it as follows: Delivery Expense $24.00 Flowers Expense $36.00 Postage Expense $10.00 Supplies Expense $15.00 She writes a check to reimburse the Petty Cash fund. After consulting with Professor Hirt, she decides to increase the amount of the fund to $200.00 and writes a check to do so. Properly record these transactions in order of occurrence, i.e.…Helen was a very forgetful person, so she had placed her bank code (PIN number) on the back of her debit card. A thief stole Helen’s card and was able to take $100 from an ATM on the day of the theft. That same day, Helen realized that the card was gone and phoned her bank. The following morning, the thief withdrew another $100. For how much, if anything, is Helen responsible? Why?