Accounting 2001 UConn Quiz 4 with accurate detailed answers

Accounting 2001 UConn Quiz 4 with accurate detailed || || || || || || ||




answers
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Record Interest Received - ✔✔Cash
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|| Interest Receivable||




Record ETF received from Customer - ✔✔Cash
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|| Account Receivable ||




Record Customers Check rejected as NSF - ✔✔Account Receivable
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|| Cash


Record Service Charge - ✔✔Office Expense
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|| Cash


Record Company Error - ✔✔Accounts Payable
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|| Cash


Internal Control Components - ✔✔1. Control Environment
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2. Risk Assessment
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3. Control Activities
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4. Information and Communication
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5. Monitoring Activities
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Control Environment - ✔✔The attitude people in the organization hold regarding internal control
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, Risk Assessment - ✔✔Managers should continuously assess the potential for fraud and other
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risks that could prevent the company from achieving its objectives
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Control Activities - ✔✔Work responsibilities and duties completed to reduce risks to an
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acceptable level ||




Information and Communication - ✔✔An effective internal control system generates and
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communicates information about activities affecting the organization to support sound decision
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making.


Monitoring Activities - ✔✔Internal control is evaluated to determine whether it is working as
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intended


Internal Control for Cash - ✔✔Important because the volume of cash transactions is enormous
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and because cash is valuable and portable and therefore poses a high risk of theft.
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Principles of Control Activities - ✔✔1. Establish Responsibility
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2. Segregate Duties
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3. Restrict Access
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4. Document Procedures
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5. Independently Verify
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Establish Responsibility - ✔✔Assign each task to only ONE employee. Easier to identity the
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person responsible for theft.
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EX: Give a separate cash register drawer to each cashier at the beginning of a shift
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Segregate Duties - ✔✔Assigning responsibilities so that one employee can't make a mistake or
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commit a dishonest act without someone else discovering it
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