What does it mean to say that internal control has limitations and what are these limitations?
1. What does it mean to say that internal control has limitations and what are these limitations?
2. Provide an appropriate response based on the following scenarios.
Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented?
Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?
3. What is petty cash and what purpose(s) does it serve?
4. What types of controls should be in place to make sure people in the office don't just take from petty cash (for their own personal use) whenever they feel like it? In your opinion, what is an appropriate amount to have in petty cash?
5. Prepare the necessary
(a) On March 1, issued a check to establish a petty cash fund of $1,410
(b) On April 1, the amount of cash in the petty cash fund is $440. Issued a check to replenish the fund, based on the following summary of petty cash receipts: repair expense, $850, and miscellaneous selling expense, $80. Record any missing funds in the cash short and over account.
6. What is the difference between an account receivable and a note receivable?
7. What is the formula for calculating interest on a note receivable?
8. Please calculate the interest on a $10,000, 120-day, 12 percent note. Once you have determined the interest amount, briefly explain what it means. When does the interest get recorded?
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