ACCT 1211: Accounting I - Assignment 7

ACCT 1211: Accounting I A7-1
Acct 1211_Student ID_Student
Name_Assignment_7
Question 1
(20 marks)
A.
1. Bank error in recording a deposit for $ 377 should have been $ 773: c.
2. Bank debit memo for service charge: b.
3. Outstanding cheques: d
4. Outstanding cheques from the previous month that are still outstanding: d
5. Bank collection of a note receivable on Sew Safe’s behalf: a
6. Deposits in transit for the current month: c
7. Bank credit memo for interest earned on Sew Safe’s bank balance: a
8. NSF cheques: b
9. Book error: Sew Safe credited cash for $ 5,000. The correct credit was $ 500: b
10. Bank error: the bank decreased Sew Safe’s bank account for a cheque written by another
bank customer: c
B. The items which will result in adjustment in the company records are bank debit memo for
services charges, banks collection made on behalf of the client, interest credited, NSF
Credited and in case of any book errors made by the client. These items would be adjusted in
the books of the lient.

A7-2 Assignment 7
Question 2
(20 marks)
A. The missing internal control procedures are as follows:
1. The sale of tickets of charity golf tournament and also handling of the cash is done by 16
years old son of the organizer. The sale of ticket should be carried out by the organizer or
a professional.
2. The management should bank the cash which is collected by the business at least twice in
a week in order to keep the cash collected secure.
3. The employee who orders the merchandise should not approve the same and a supervisor
is needed to approve such orders.
4. The bookkeeper should be changed from year to year or once in two years so that there is
no opportunity provided for manipulating the transactions recorded in the books of
accounts
5. The person who is appointed as a cashier should not be allowed stay in the same position
year after year as this gives scope for misconduct in the business.
6. The paper works which are there in department helps in maintaining a trail of papers and
also helps in scrutiny and thereby also reduces incidence of fraud and misconduct.
7. The ticket taker helps the business to recognize how much tickets were sold and not using
the same might give the sales person an opportunity to misappropriate some cash of the
business.