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Preparing Comprehensive Bank Reconciliation with Theft and Internal Control Deficiencies (Example)

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Course Name Bank Reconciliation Report Name Professor’s Name Date Submitted University The most prudent way of maintaining good controls over cash is by preparing bank reconciliation statements on monthly basis so as to be able to detect all the errors and misappropriations that may have occurred during day to day operations of the company. Human beings are prone to make errors which can range from postings made in the journal entries omissions among others which can adversely affect the business if proper measures are not taken into account. The most challenging task in identification of this errors occurs if the employees in charge of the cash are involved in fraudulent activities to steal the cash and then make an attempt to conceal the theft (Hightower 2013). The following is the correct bank statement reconciliation which can be prepared from the data given for Daisey Company. BANK RECONCILIATION STATEMENT AS that each and every company should constantly do physical cash count to threaten those who are in charge of it. In conclusion it is true that reconciling bank accounts is a good way to help maintain internal controls over cash. A company should prioritize on putting strong and effective internal control systems in place rather than focusing or reducing the total operating costs. This is because preventing theft of cash in a company is better than trying to reduce the cost of wages. A company cannot survive without adequate cash and if there are loopholes that allows the cash to be stolen the company will definitely fail (Rodgers Tarantino & Tarantino 2008). References Top of Form Hightower R. (2013). Internal controls policies and procedures. Hoboken N.J: Wiley. Bottom of Form Rodgers I. In Tarantino A. & Tarantino A. (2008). Financial internal controls best practices. Hoboken: John Wiley & Sons. [...]

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Purpose of Assignment Reconciling bank accounts is a good way to help maintain internal controls over cash. With time lags and posting errors it is easy for cash transactions to be omitted, recorded in a different accounting period, or reflect incorrect amounts. This assignment with give you practical experience in reconciling the cash balance as noted on the company books to the bank's records. Assignment Steps Resources: Financial Accounting: Tools for Business Decision Making Scenario: Daisey Company is a very profitable small business. It has not, however given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and book-keeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2017, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for $253.25, No. 862 for $190.71, No. 863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25. This memorandum has not been recorded by Daisey. The company's ledger showed one Cash account with a balance of $21,877.72. The balance included undepositied cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash: Cash balance per books, October 31 $21,877.72 Add: Outstanding checks No. 862 $190.71 No. 863 226.80 No. 864 165.28 482.79 22,360.51 Less: Undeposited receipts 3,795.51 Unadjusted balance per bank, October 31 18,565.00 Less: Bank credit memorandum 185.00 Cash balance per bank statement, October 31 $18,380.00 Prepare a 1,050-word bank reconciliation report (hint: deduct the amount of the theft from the adjusted balance per books) including the following: Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method. What principles of internal control were violated in this case? Show all work in the Excel® spreadsheet and submit with the reconciliation report.

Subject Area: Accounting

Document Type: Paraphrasing

This project has already been completed by one of the Studybay experts. The client rated this project:

Project's rating is 5/5

Price $40

Words 1100

Pages 4

Completed in 2 days

Expert Academic master

Client Review

Great work!

Positive
02.19.2017

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