ACCT 1211: Accounting I - Assignment 7 Solutions - [University Name]

This document provides a comprehensive solution to Assignment 7 for ACCT 1211, an introductory accounting course. The assignment covers several key accounting concepts including bank reconciliation, internal control procedures, and the imprest petty cash system. The solution includes detailed explanations and calculations for reconciling bank statements, identifying missing internal control procedures, preparing journal entries, and managing petty cash funds. The document also contains example general journal entries for various transactions, including cash at bank, notes receivable, interest revenue, and expenses. Overall, the assignment offers a practical application of accounting principles and provides a detailed guide for students to understand and solve accounting problems related to these topics.

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.

ACCT 1211: Accounting I A7-3
Question 3
(30 marks)
A.
Particulars Amount Amount
Cash Balance as per Bank Statement 8330
Add:
Receipts, recorded in the Cash book, but
not recorded in Pass Book 3700
Payments recorded in the Pass Book, but
not recorded in the Cash Book:
EFT 600
NSF 1000
SC 50
Chq.No. - 305 400 5750
14080
Less:
Receipts, recorded in Pass Book, but not
entered in Cash Book 1720
Receipts, wrongly entered by Bank 850
Payments made by Company, but not
encashed from Bank:
Ch. No.-303 800
Ch. No.- 307 490 3860
Cash Balance as per Pass Book 10220
B.
General Journal
DATE
2018
ACCOUNT TITLES AND
EXPLANATIONS
POST.
REF. DEBIT CREDIT
Cash at Bank 1300
Notes Receivable 1100
Interest Revenue 200
Insurance Expense 600

A7-4 Assignment 7
Cash at Bank 600
Cash at Bank 1720
Accounts Receivable 1720
Accounts Receivable 1000
Cash at Bank 1000
Bank Charges 50
Cash at Bank 50
Purchase 400
Cash at Bank 400
4-4 Copyright © 2017 Pearson Canada Inc.

ACCT 1211: Accounting I A7-5
Question 4
(30 marks)
A. The imprest system which is followed in maintenance of petty cash system allows businesses
to maintain part of the cash allowed as petty cash which can be used for emergency purpose.
The system requires that at any given point of time such minimum cash amount must be
maintained by the business.
B. $ 420
C.
1. Create the petty cash fund.
General Journal
DATE ACCOUNT TITLES AND EXPLANATIONS
POST.
REF. DEBIT CREDIT
01 Nov Petty cash A/c ……………………………Dr 420
To Cash A/c 420
Petty Cash Fund is established
2. Refill the petty cash fund.
General Journal
DATE ACCOUNT TITLES AND EXPLANATIONS
POST.
REF. DEBIT CREDIT
30 Nov Staff Barbeque Dr 501 150
Cab fare for staff re barbecue Dr 502 80
Office Supplies Dr 503 30
Delivery of Parcel Dr 504 20
Office Supplies Dr 505 60
To Cash A/c 340
Petty Cash Replenished
D.
General Journal
DATE ACCOUNT TITLES AND EXPLANATIONS
POST.
REF. DEBIT CREDIT
01 Nov Petty cash A/c ……………………………Dr 180
To Cash A/c 180
Petty Cash Fund is established