Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 50ITC
To determine
Suggest whether the given transfers are understated, overstated, or correct. Provide an example that would cause the given transfer.
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Listed below are four interbank cash transfers, indicated by the letters a, b, c and d, of a client for late December 2022 and early January 2023. For each of the transfers a through d, indicate whether cash is understated, unaffected, or overstated by the transfer and provide a brief example of what could cause the situation in which cash is either understated or overstated.
Bank Account One
Bank Account Two
Disbursing Date
Receiving Date
(Month/Day)
(Month/Day)
Per Bank
Per Books
Per Bank
Per Books
a.
1/05
12/31
1/03
1/03
b.
1/03
12/31
12/31
12/31
c.
1/04
1/02
1/02
12/31
d.
1/05
1/03
12/30
1/03
with details please
1. Brooks Agency set up a petty cash fund for $270. At the end of the current period, the fund contained $192 and had the following
receipts: entertainment, $33, postage, $21, and printing, $24.
Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period.
View transaction list
Journal entry worksheet
Record the establishment of the petty cash fund.
Nate: Enter debits befare oredits.
Transaction
General Journal
Debit
Credit
1a
Hecord entry
Clear entry
View general journal
Chen Company established a $1,450 petty cash fund on January 1, Year 1.
Required
a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction?
b. Show the establishment of the petty cash fund in a horizontal statements model.
c. Record the establishment of the fund in general journal format.
Chapter 10 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prepare an example of lapping of cash receipts,...Ch. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - Prob. 14RQCh. 10 - Prob. 15RQCh. 10 - Prob. 16RQCh. 10 - Explain two procedures by which auditors may...Ch. 10 - Prob. 18RQCh. 10 - Prob. 19RQCh. 10 - Prob. 20RQCh. 10 - Prob. 21RQCh. 10 - Prob. 22RQCh. 10 - Prob. 23RQCh. 10 - Prob. 24RQCh. 10 - Prob. 25RQCh. 10 - Prob. 26QRACh. 10 - Henry Mills is responsible for preparing checks,...Ch. 10 - During the first few months of the year, John...Ch. 10 - Prob. 29QRACh. 10 - Prob. 30QRACh. 10 - Prob. 31QRACh. 10 - Prob. 32QRACh. 10 - Prob. 33QRACh. 10 - Prob. 34QRACh. 10 - Prob. 35QRACh. 10 - Prob. 36QRACh. 10 - Prob. 37QRACh. 10 - Select the best answer for each of the following...Ch. 10 - Prob. 38BOQCh. 10 - Prob. 38COQCh. 10 - Prob. 38DOQCh. 10 - Prob. 38EOQCh. 10 - Prob. 38FOQCh. 10 - Reconciliation of the bank account should not be...Ch. 10 - The auditors suspect that a clients cashier is...Ch. 10 - Prob. 38IOQCh. 10 - Prob. 38JOQCh. 10 - Prob. 38KOQCh. 10 - Prob. 38LOQCh. 10 - Which of the following represents a correct...Ch. 10 - Which of the following correctly identifies a risk...Ch. 10 - Which of the following correctly identifies a risk...Ch. 10 - Prob. 39DOQCh. 10 - Prob. 39EOQCh. 10 - Prob. 39FOQCh. 10 - Prob. 40OQCh. 10 - Prob. 41OQCh. 10 - Prob. 42OQCh. 10 - Prob. 43OQCh. 10 - Prob. 44OQCh. 10 - Prob. 45OQCh. 10 - Prob. 46PCh. 10 - Prob. 47PCh. 10 - Prob. 48PCh. 10 - Prob. 49PCh. 10 - Prob. 50ITCCh. 10 - Prob. 51ITCCh. 10 - Prob. 52RDCCh. 10 - Prob. 53EC
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- Listed below are 7 interbank cash transfers for late December 2020 and early January For each transfer, indicate whether cash is: Understated, Overstated or Correct. Disbursing Bank Dates Receiving Bank Dates Check# Per Bank Per Books Per Bank Per Books Understated, Overstated or Correct? CK1 01/04/21 01/01/21 01/03/21 01/01/21 CK2 01/03/21 01/02/21 12/31/20 01/03/21 CK3 12/31/20 01/03/21 12/30/20 01/03/21 CK4 12/29/20 12/29/20 12/29/20 12/29/20 CK5 01/04/21 12/31/20 01/02/21 01/02/21 CK6 01/02/21 01/01/21 12/31/20 12/31/20 CK7 01/02/21 12/30/20 12/31/20 12/30/20arrow_forward1. Brooks Agency set up a petty cash fund for $270. At the end of the current period, the fund contained $192 and had the following receipts: entertainment, $33; postage, $21; and printing, $24. Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period. View transaction list Journal entry worksheet 1 2 > Record the establishment of the petty cash fund. Note: Enter debits before credits. Transaction General Journal Debit Credit 1a Record entry Clear entry View general journal 2. Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry. (Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)arrow_forwardThe following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales. a. Actual cash in cash register, $5,757; cash receipts per cash register tally, $5,780. b. Actual cash in cash register, $5,601; cash receipts per cash register tally, $5,488. If an amount box does not require an entry, leave it blank. a. b. Accounts Payable Accounts Receivable Cash Sales Sales Discountsarrow_forward
- The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales. a. Actual cash in cash register, $4,149; cash receipts per cash register tally, $4,178. b. Actual cash in cash register, $3,573; cash receipts per cash register tally, $3,461. If an amount box does not require an entry, leave it blank. a. b.arrow_forwardWhich of the following can be considered as an effective control of cash?A. One person handles the receipts and disbursements of cash.B. Cash is deposited monthly into a bank.C. There is approval of cash payments.D. A reconciliation of the bank balance with the cash balance is prepared twice a year.arrow_forward1. Brooks Agency set up a petty cash fund for $140. At the end of the current period, the fund contained $37 and had the following receipts: entertainment, $48; postage, $28; and printing, $27. Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period. 2. Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry.arrow_forward
- The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales. a. Actual cash in cash register, $5,154; cash receipts per cash register tally, $5,170. b. Actual cash in cash register, $4,339; cash receipts per cash register tally, $4,228. If an amount box does not require an entry, leave it blank. a. Cash 5,154 Cash Short and Over 13 Sales 5,170 b. Cash 4,339 Cash Short and Over 4,228 Sales Previous Nextarrow_forward1. Brooks Agency set up a petty cash fund for $140. At the end of the current period, the fund contained $37 and had the following receipts: entertainment, $48, postage, $28; and printing, $27. Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period. 2. Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period. View transaction list Journal entry worksheet < 1 2 Record the establishment of the petty cash fund. Note: Enter debits before credits. Transaction 1a General Journal Debit Credit Record entry Clear entry View general journalarrow_forwardBrooks Agency set up a petty cash fund for $150. At the end of the current period, the fund contained $28 and had the following receipts: entertainment, $70; postage, $30; and printing, $22. Prepare journal entries to record (a) establishment of the fund and (b) reimbursement of the fund at the end of the current period.Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry._____ a.Fund amount is being reduced._____ b.Fund amount is being increased._____ c.Fund is being eliminated._____ d.Fund is being established.arrow_forward
- The following information is available to reconcile Sleepy Time Bedding's book balance of cash with its bank statement cash balance as of July 31: a. On July 31, the company's Cash account has a $26,038 debit balance, but its July bank statement shows a $28,673 cash balance. b. Check No. 1531 for $1,696 and Check No. 1540 for $928 were outstanding on the June 30 bank reconciliation. Check No. 1540 is listed with the July canceled checks, but Check No. 1531 is not. Also, Check No. 1565 for $712 and Check No. 1569 for $2,464, both written in July, are not among the canceled checks on the July 31 statement. c. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 1556 for July rent was correctly written and drawn for $1,400 but was erroneously entered in the accounting records as $1,390. d. A credit memorandum enclosed with the July bank statement indicates the bank collected $9,660 cash on a noninterest-bearing note…arrow_forwardChen Company established a $1,450 petty cash fund on January 1, Year 1. Required a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? b. Show the establishment of the petty cash fund in a horizontal statements model. c. Record the establishment of the fund in general journal format. Complete this question by entering your answers in the tabs below. Required A Required B Required C Is the establishment of the petty cash fund an asset source, use, or exchange transaction? Is the establishment of the petty cash fund an asset source, use, or exchange transaction? Required A Required B >arrow_forwardash are assigned to different individuals. Make journal entry using cash count sheet. BE7.7 (LO 2), AP While examining cash receipts information, the accounting department determined the following information: cash on hand $1,125.74 and cash sales per register tape $988.62. Prepare the required journal entry. Identify the internal control principles applicable to cash disbursements. cash disbursements. Identify the internal control principle that is applicable to each procedure.arrow_forward
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