OPEN UNIVERSITY FOR ADULTS.

Career

Business Administration

Name

Maria Alexandra Peralta Espinal

Tuition

2018-04341

Subject

Accounting II

Task

Facilitator

Marlon Anzellotti
Indication and space to submit task #6

1. Prepare a teaching scheme that contains the components of

internal control. Perform the following exercises: P7-25A page
415, P7-27A page 416, P7-28A page 417 and P7-30A page 418
and go up to the platform for this option.

Control It consists of establishing an

environment environment that stimulates and
influences the activity of personnel
with respect to the control of their
activities.

risk It is the identification and analysis of

assessment risks relevant to the achievement of
objectives and the basis for
determining how such risks should be
 Control They are those carried out by
management and other personnel of
activities
the organization to carry out the
assigned activities on a daily basis.

Information They are designed throughout the

and entity and all of them serve one or
communicatio more objectives and control.

Supervision In general, control systems are

and monitoring designed to operate under certain
circumstances.

Terms: Definitions:

1. Internal control J TO. What internal and external

 auditors do.

2. Control procedures K b. Part of internal control that ensures

that resources are not wasted.

3. Safety barriers E c. Law that requires internal control

systems to be tested.

4. L -coding d. Provides details of Business

Transactions.

5. Control environment M AND. Limit access to a local network.

6. Information system F. Control procedure divides Duties

between two or more people.

7. Separation of responsibilities F g. Identification and evaluation of

Threats to the Business.

8. Supervision of controls H. It can be internal and external.

9. Documents D YO. Components of internal control

that help ensure that decision makers
receive accurate data.

10. Audits J. Organizational plans and all related

measures that safeguard assets,
motivate employees to follow
company policies, promote
operational efficiency, and ensure
accurate and reliable accounting data.

11. Audits K. Components of internal control that

help ensure that business goals are
achieved.

12. Risk assessment G L. Reorder data through a

mathematical process.

13. Sarbanes-Oxley C Act M. The “level or tone of senior

 management.”

1 required. Match the terms with their definitions

P7-27A (Learning Objective 6) Preparing a Bank Reconciliation

and Journal Entries [20-25 min] Below are the April cash
records for Donald Insurance:

Cash receipts cash payments

Date Charged to cash Checks no. Cash payment

Apr 4 $4,160 1416 $890

9 530 1417 140

14 520 1418 670

17 2,170 1419 1,290

30 1,860 1420 1,450

1421 800

1422 660

Donald Insurance's Cash account shows a balance of $17,040v as of April 30.

On April 30, Donald Insurance received the following bank statement:

April bank statement

initial balance $13,700

deposits and other payments:

Apr 1 TEF 500

5 4,160

10 530

15 520
 18 2,170 9,480

22 BC

Checks and other charges:

Apr 8 CHFI $900

11 (check no. 1416) 890

19 TEF 200

22 (check no. 1417) 140

29 (check no. 1418) 670

30 (check no. 1419) 1,920

30SC 30 4,750

Final balance 18,430

Explanations: CB: collections made by the bank; EFT: electronic funds transfer;
CHFI: check with insufficient funds; CS: service charges

Additional data for bank reconciliation:

a) The TEF payment was for the collection of rent. The TEF charge was for an
insurance payment.

b) The check with insufficient funds was received from a customer.

c) The bank collection of $1,600 was for a note receivable.

d) The correct amount of the rental expense check 1419 is $1,920. Donald's
controller mistakenly recorded the check for $1,290.

Is required

1. Prepare the bank reconciliation for Donald Insurance as of April 30, 2011.
2. Journalize any entries required for the bank reconciliation.

Donald Insurance

Bank reconciliation

April 30, 2011

Values in RD$

Bank reconciliation books

Balance April 30 18,430 balance as of April 30 17,040

Further further

Deposits in transit 1,860 reception of teph. 500

Less payments made 1,600

Checks in circulation 2,910 less

checks with insufficient 900

funds

errors in books 630

service charges 30

insurance payment (Tef) 200

Adjusted bank balance 17,380 adjusted bank balance 17,380

Donal Insurance diary book

 April 2011

values in RD$

date detail debit credit

30 cash 500

rent receivable 500

to record rent collection

30 cash 1,600

accounts receivable 1600

to record payments made

30 accounts receivable 900

cash

to record check received without funds 900

30 accounts receivable 630

cash

to record correct errors in books 630

30 banking service charges 30

effective
 to record the charge for banking services

30

30 insurance 200

cash 200

to record insurance expenses

total 3,860 3,860

P7-28A (Learning Objective 6) Preparing a Bank Reconciliation

and Journal Entries [20 min]

The bank statement just arrived from Federal Bank as of May

31, for Wood's Healthcare. To prepare the bank reconciliation,
you collect the following data.

Data list:

a) The balance as of May 31 is $4,860.

b) The bank statement includes two charges for insufficient funds checks from
customers. One is for $380 (#1); and the other, for $100 (#2).

c) The following Wood checks are outstanding as of May 31.

Check no. Amount

237 $ 60

288 180

291 570

294 600

295 60
 295 130

d)Wood collects payments from some clients through TEF. The May bank
statement shows a TEF deposit of $1,100 for a collection on account.

e) The bank statement includes two special deposits that Wood has not yet
recorded: $870, for dividend income; and $10, for interest income Wood earned
on his bank balance during May.

f) The bank statement shows a subtraction of $40 for banking service charges.

g) On May 31, Wood's treasurer deposited $300, but this deposit does not
appear on the bank statement.

h) The bank statement includes a deduction of $900 for a check drawn on Multi-
State Freight Company. Wood notified the bank of this banking error.

i) Wood's Cash account shows a balance of $3,000 as of May 31.

Is required

1. Prepare the bank reconciliation for Wood's Healthcare as of May 31, 2012.

2. Journalize any entries required for the bank reconciliation. Include an

explanation for each entry.

Wood's Healthcare

Bank reconciliation

May 31, 2012

values in RD$

Bank reconciliation books

Balance as of May 31 4,860 balance May 31 3,000

Further further

300 Tef's reception 1,100

Deposits in transit

Errors in the bank 900 interest income 10

Less less

Checks in circulation 1,600 service charges 40

funds checks 480

Reconciled bank 4,460 Reconciled bank 4,460

balance balance

Wood's Healthcare

Bank reconciliation

May 31, 2012

values in RD$

Date detail debit credit

31 cash 1,100

receivable 1,100

to register collection via Tef

31 cash 870

dividend income
 to record dividend income 870

31 cash 10

interest income

to record interest income 10

31 banking service expenses 40

cash

to record expenses for banking services 40

31 receivable 480

cash 480

to record check received without funds

Totals 2,500 2,500

P7-30A (Learning Objective 9) Accounting for Petty Cash

Transactions [20 to 30 min]

On November 1, Fab Salad Dressings creates a petty cash fund

with a comprehensive balance of $400. During November,
Sunny Lewis, the fund's custodian, signs the following petty
cash vouchers:

Voucher number
petty cash concept quantity

101 Office Supplies $20

102 executive taxi fare 15

103 package delivery in city 25

104 money for a meal with the mayor 30

105 inventories 70

On November 30, before replenishment, the fund contains these vouchers plus
cash for $245. The accounts affected by payments from the petty cash fund are
Office Supplies Expense, Travel Expenses, Delivery Expenses, Entertainment
Expense, and Inventories.

Is required

1. Explain the characteristics and internal control considerations of a

comprehensive fund.

2. As of November 30, how much cash should the petty cash fund hold before
it is replenished?

3. Journalize all entries necessary to create the fund and replenish it. Include
explanations.

4. Make the entry on December 1 to increase the fund balance to $450. Include
an explanation and briefly describe what the custodian does.