FinAcctg7SMCh04Word格式.docx

1、Student responses may vary.（5-10 min.） S 4-4Electronic DeviceObjective of Internal Control1. Electronic sensor for1. Safeguard assets merchandise2. Bar codes1. Promote operational efficiency2. Ensure accurate accounting records3. Surveillance cameras2. Encourage employees to follow company policy（10

2、 min.） S 4-5 Reitmeier Corp.Bank ReconciliationAugust 31, 20XXBANKBOOKSBalance, August 31 $3,405 $2,500Add: Deposit in transit 500 Bank collection 550 3,905 Interest revenue 10 3,060Less: Service charge（20） Outstanding checks （900） NSF check （35）Adjusted bank balance $3,005Adjusted book balanceReitm

3、eier has cash of $3,005. （5 min.） S 4-6Aug.31Cash.550 Accounts Receivable.Collection on account.10 Interest Revenue.Interest earned on bank balance.Miscellaneous Expense.20 Cash.Bank service charge.Accounts Receivable35 Cash.NSF check.（5 min.） S 4-7It appears that the employee has stolen $1,000 （adj

4、usted book balance, $3,600 adjusted bank balance, $2,600）. The adjusted bank balance is the companys true cash balance, and the company books show more cash on hand. Therefore, the books must be incorrect.（5 min.） S 4-8McCormick will notice a gap in the sequence of sales receipts for the receipt tha

5、t Castillo destroyed. This knowledge will lead McCormick to investigate what happened to the missing receipt and what happened to the related cash.（10 min.） S 4-91. Paying by check carries three controls over cash: The check provides a record of the payment. The check must be signed by an authorized

6、 official. Before signing the check, the official should study the evidence supporting the payment.2. A dishonest purchasing agent could: Purchase goods and have them delivered to his home or other location that he controls. Approve payment by the company for goods that he spent too much on, and the

7、n split the excess with the supplier. Companies avoid this internal control weakness by separating the following duties related to the purchase of, and payment for, goods: purchasing goods receiving goods approving and paying for goods（5 min.） S 4-10A cash budget starts with the beginning cash balan

8、ce, adds budgeted cash receipts, and subtracts budgeted cash payments. The result is cash available at the end of the period. By comparing cash available to our budgeted cash balance, we can see whether we have cash available for additional investments, or if well need new financing.（5-10 min.） S 4-

9、11California Artichoke GrowersCash BudgetYear 2008MillionsCash balance, beginning$ 4Estimated cash receiptstotal 97 101Estimated cash paymentstotal （95）Cash available （needed） before new financing 6Budgeted cash balance needed （5）Cash available for additional investments$ 1（5 min.） S 4-12Ford should

10、 report the errors to McGregor because McGregor is Fords supervisor, and McGregor is responsible for the errors. If McGregor fails to take action, then Ford should report the errors to the manager of the organization. In any event, outsiders who are relying on YellowPs financial statements must be m

11、ade aware of the need to correct the reported net income figure.Exercises（10 min.） E 4-13A computer virus enters program code without your consent and performs destructive action to your computer files or programs.A Trojan Horse is a malicious computer program that hides inside a legitimate program

12、and works like a virus to corrupt your computer files or programs.A phishing expedition can be a Web site that attracts visitors who may be tricked into revealing their account numbers, social security numbers, passwords, or other valuable data. The creator of the Web site then uses the unsuspecting

13、 Web- site visitors data to steal from them and for other illicit purposes.（20-30 min.） E 4-14a. Separation of duties limits the chances for fraud （loss of assets） and also promotes the accuracy of the accounting records. This allows managers to rely on the accounting records to produce information

14、useful for operating the business.b. Cash is important not because of its amount as reported on the balance sheet, but because of its effect on a business. All transactions ultimately affect cash. Businesses purchase assets and must pay cash. They make sales and collect cash. All expenses ultimately

15、 require cash. Also, cash is susceptible to theft because it is a medium of exchange. These factors combine to give cash more importance than its account balance would suggest.c. Punching a hole through supporting documents reduces the opportunity for fraud. Without this control procedure, a dishone

16、st employee could resubmit documents for payment a second time. The employee could change the payees address and have the check sent to an address the employee controls. Or the employee could arrange to have the second payee split the payment with the employee. Canceling the documents makes it diffi

17、cult to get approval for a duplicate payment.（5-20 min.） E 4-15a. Miller has access to the cash collected, and he also prepares the cash report. With access to both items, Miller can steal cash and falsify his cash report to conceal his theft.b. Fisher prepares the purchasing order and also receives

18、 the goods. She can add some items to the purchase order and have these extra items shipped to a location she controls. When the goods come in, she checks the incoming shipment, so theres no outside party to learn of her dishonesty.c. An external audit normally includes an examination of the clients

19、 financial statements and the underlying transactions. With no examination of these important items, the auditor may reach the wrong conclusion about Mattsons financial statements. People who lent money to Mattson or bought Mattson stock may make unwise decisions in their dealings with Mattson and l

20、ose money as a result.（10 min.） E 4-16Cash payments:a. Strong internal control. There is a good separation of duties. Supervisors request equipment, and the home office purchases the equipment.b. Weak internal control. Supervisors both request, purchase, and pay for equipment with little oversight b

21、y the home office.Cash receipts:a. Weak internal control. The accountant both handles cash and accounts for cash.b. Strong internal control. There is a good separation of duties. Different people handle cash and account for cash.（10 min.） E 4-17To prevent Moores embezzlement, Downtown Flints board o

22、f directors could have:a. Not permitted Moore to write Downtown Flint Checks. Instead, appoint a board member to write the checks.b. Not permitted Moore to receive cash that came to Downtown Flint. Have cash sent to a lock box at the bank and appoint a board member to get the cash from the lock box.

23、c. Supervised Moores work by examining Downtown Flint documents such as paid checks.d. Had an audit of Downtown Flint transactions and financial statements.（5-10 min.） E 4-181. b 5. d2. b 6. c3. d 7. c4. a（10-20 min.） E 4-19LeAnn BryantNovember 30, 20X6BANK: Balance, November 30$ 604 Add: Deposit in

24、 transit846 Less: Outstanding checks: Check No. 626$ 25 627 275 （300） Adjusted bank balance$1,150 BOOKS:$1,197 Correction of book error Recorded $85 check as $58$ 27 8 12 （47） Adjusted book balance（10-20 min.） E 4-20Tim Van WinkleMay 31, 20XX Balance, May 31$ 595 1,788 2,383 （603）$1,780 $1,882 EFT collection rent 300 2,182 $ 12