Questions from Financial Accounting

Q: Knott Inc. has a petty cash fund of $750.

Knott Inc. has a petty cash fund of $750. (a) Since the petty cash fund is only $750, should Knott Inc. implement controls over petty cash? (b) What controls, if any, could be used for the petty cash...

Q: The following selected transactions were completed during April between Swan Company and

The following selected transactions were completed during April between Swan Company and Bird Company: Apr. 2. Swan Company sold merchandise on account to Bird Company, $32,000, terms FOB shipping poi...

Q: (a) Name and describe the five elements of internal control

(a) Name and describe the five elements of internal control. (b) Is any one element of internal control more important than another?

Q: Before inventory purchases are recorded, the receiving report should be reconciled

Before inventory purchases are recorded, the receiving report should be reconciled to what documents?

Q: The ticket seller at a movie theater doubles as a ticket taker

The ticket seller at a movie theater doubles as a ticket taker for a few minutes each day while the ticket taker is on a break. Which control procedure of a business’s system of internal control is vi...

Q: Sergio Flores works at the drive-through window of Big &

Sergio Flores works at the drive-through window of Big & Bad Burgers. Occasionally, when a drive-through customer orders, Sergio fills the order and pockets the customer’s money. He does not ring up t...

Q: Abbe Co. is a small merchandising company with a manual accounting

Abbe Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had be...

Q: Paragon Tech Company, a communications equipment manufacturer, recently fell victim

Paragon Tech Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Paragon Tec...

Q: Identify each of the following reconciling items as: (a

Identify each of the following reconciling items as: (a) An addition to the cash balance according to the bank statement, (b) A deduction from the cash balance according to the bank statement, (c) An...

Q: Which of the reconciling items listed in Exercise 8-16 require

Which of the reconciling items listed in Exercise 8-16 require an entry in the company’s accounts? In Exercise 8-16 1. Bank service charges, $30. 2. Check of a customer returned by bank to company be...