Suzie has not reconciled the company\'s cash balance with that of the bank since
ID: 2363406 • Letter: S
Question
Suzie has not reconciled the company's cash balance with that of the bank since the company was started. She asks summit Bank to provide her with a six-month bank statement. To save time, Suzie makes deposits at the bank only on the first day of each month.
After comparing the two balances, Suzie has some concern because the bank's balance of $50,500 is substantially less than the company's balance of $64,200.
Required:
1)Discuss any problems you see with Great Adventures' internal control procedures related to cash.
Explanation / Answer
Great Adventure Deposits: Total deposits as per cash account = $122,900 Total deposits as per bank statement = $103,400 Difference = $19,500 This difference has occured due to: Race receipts on 12/15 not send to bank = $20,000 Bank interest on 9/30 not entered in cash account = -$200 Bank interest on 12/31 not entered in cash account = -$300 Difference is = $19,500 Great Adventure Checks / Debit cards: Total checks / Debit cards as per cash account = $58,700 Total checks / Debit cards as per bank statement = $52,900 Difference = $5,800 This difference due to: Salary on 12/16 No: 107 is not send to bank = $2,000 Dividend on 12/31 No: 108 is not send to bank = $2,000 Dividend on 12/31 No: 109 is not send to bank = $2,000 Dividend on 12/31 No: 109 is not send to bank = $2,000 Service fees not entered in cash account: on 9/30 = -$100 on 12/31 = -$100 Diffenrence = $5,800 Closing balance as per cash account is = $64,200 Closing ablance as per bank statement is = $50,500 Difference = $13,700 This difference is due to: Access in deposits as per cash account = $19,500 Access Checks/Debit cards as per cash account = $5,800 Diffenrence is = $13,700 These all differences have occured due to these following reasons: Deposits are not sending to bank on same date of recording in cash account. Checks are not sending to bank on same date of entering in cash account. Bank interest receipts and service charge expenses are not entered in cash accont. To avoide these all things a good internel control systam has to establish in this organization. Thank you.....Related Questions
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