Sheri The Man

Accounting Quick Study Assignment (Chapter 7) QS 7-1.                  What is the difference amongst the monetary value tranquility and gold equivalent? cause.                  The liquid of an summation refers to how quickly and easily, an asset can be converted into other types of assets or be used to buy operate or encounter obligations. Assets argon evaluated in terms of their liquidity. gold, be the most liquid and prepaid expenses, being the least liquid.                  Conversely, notes equivalents be those assets, which are short-term, or temporary, investments that are highly liquid, that is, they can be at a time converted to capital. These assets even accede in increasing the companys return. most examples are investments in treasury bills, commercial paper, and money marketplace gillyflowers. QS 7-2a.                  What is the main o bjective of internal control and how is it compassed? Answer                  The main objective of a properly designed immanent system is to promote trading operations and protect assets from waste, fraud, and theft. It also helps to understand that accurate and reliable noteing information are produced. It is a true(p) system to manage the internal operations. To accomplish the internal control system, and for it to work efficiently some bounteous conventions are established. They are as postdate: 1.         Clearly apply Responsibilities. 2.          note Adequate Records. 3.         Insure Assets and Bond Key Employees. 4.          crystalize Record-Keeping and grasp over Assets. 5.         Divide Responsibility for Related Transactions. 6.          accustom mechanised Devices Whenever Feasible. 7.         Perform Regular and Independent Reviews . QS 7-2b.         Why shou! ld account book- property for assets be disjunct from clasp over the assets? Answer.                  Record-Keeping for assets should be separated from custody over the assets as the custodian of an asset, knowing that a set down of the asset is being kept by another employee, is not as likely to misplace, steal or waste the asset. The record keeper, who does not have access to the asset, has no reason to elude the record. This principle assures that the fraud is less likely to happen.          QS 7-3.         In a good system of internal control for cash that provides sufficient procedures for protect some(prenominal) cash receipts and cash disbursements, 3 prefatory guidelines should always be observed. What are these guidelines? Answer.                  The three basic guidelines that should be always observed, which provide adequate procedures for protecting both cash receipts and cash disbursements are as follow:          1.         Duties should be separated so that people responsible for truly handling cash are not responsible for keeping the cash records. 2.         All cash receipts should be deposited in the bank, intact, all(prenominal) day. 3.         All cash payments should be made by cheque. QS 7-4a.                  The fiddling breeds Fund of the No-Fear Ski Club was established at $50. At the end of the month, the fund contained $4.35 and had the following receipts: speak rental $12.50, refreshments for meetings $20.15 (both expenditures to be classified as Entertainment Expenses), plaster cast $4.00, and printing $9.00. Prepare the journal entries to record (a) the establishment of the fund; (b) the reimbursement at the end of the month. Answer.         Account Title and Explanation                           Â           Dr. ! Cr.

         (a)                   skin-deep property                                                       50.00         Cash                                                                         50.00         Established a petty cash fund. (b)         Entertainment expenses                                              32.65          Postage                                                                4.00         Printing                                                                9.00                  Cash                                                                         45.65         Reimbursed petty cash. QS 7-4b.          knock off when the midget Cash account would be impute in a journal entry. Answer.                  The fund in the trivial Cash account is increased if it is being exhausted and reimbursed to frequently. If the Petty Cash Fund becomes too large due to these incre ases, some of the money from the fund is redeposited ! in the Cash account (chequing account). For much(prenominal) a reduction the Cash account is debited and the Petty Cash account is credited. If you want to get a full essay, put up it on our website: OrderEssay.net

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