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GSU ACCT 2101 - Chapter 7 Webex Copy

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The following control procedures are used at all Lewis Convenience Stores for over-the-counter cash receipts.List internal control weaknesses over cash receipts andsuggest improvements.1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy.Human Resource Controls2. All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer.Establishment of ResponsibilityThe following control procedures are used at Lisa’s Consignment Boutique for cash disbursements. List internal control weaknesses for cash disbursements and suggest improvements.1. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register.Physical Controls2. The store manager personally approves all payments before she signs and issues checks.Independent Internal VerificationSegregation of DutiesOn July 31, 2020, Keeds Company had a cash balance per books of $6,140. The statement from Dakota State Bank on that date showed a balance of $7,690.80. A comparison of thebank statement with the Cash account revealed the followingfacts. Prepare a bank reconciliation and adjusting entries.1. The bank service charge for July was $25.2. The bank collected $1,520 from a customer for Keeds Company through electronic funds transfer.3. The July 31 receipts of $1,193.30 were not included in the bank deposits for July. These receipts were depositedby the company in a night deposit vault on July 31.4. Company check No. 2480 issued to L. Taylor, a creditor, for $384 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $348.5. Checks outstanding on July 31 totaled $1,860.10.6. On July 31, the bank statement showed an NSF charge of $575 for a check received by the company from W. Krueger, a customer, on account.Adjusted Cash Balance $7,024Grier Food Store used the following information in recording its bank reconciliation for the month of April.Balance per books April 30 $ 905Balance per bank April 30 $11,300 1. Checks written in April but still outstanding $9,100. 2. Deposits of April 30 not yet recorded by bank $4,900. 3. NSF check of customer returned by bank $500. 4. Check No. 210 for $594 was correctly prepared by thecompany and processed by the bank but incorrectlyentered in the cash payments journal by the company asa payment of $549. 5. Bank service charge for April was $40. 6. A payment for supplies was incorrectly entered in thecash payments journal for $824 when Check No. 318 wascorrectly prepared and sent to the supplier for $284. Thecheck cleared the bank in April. 7. The bank collected a note receivable for the company of$6,000 plus $240 interest revenue.Adjusted cash balance


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