Reference no: EM132539387

Questions -

Q1) Why is it important for an organization to have internal controls?

Q2) What is the Sarbanes Oxley Act and why is it important?

Q3) Name two (2) internal controls that an organization can implement.

Q4) What are the limitations of internal control?

Q5) What is a petty cash fund?

Q6) What is a bank reconciliation and why are they important?

Q7) Johnson Co. establishes a petty cash fund for $200 on January 1. On January 9th the fund shows $38 in cash available along with receipts for the following expenses:

Postage $74

Transportation $29

Delivery $16

Miscellaneous $43

Prepare journal entries to:

1) Establish the fund

2) Reimburse the fund

3) Increase the fund to $450

Q8) Smith Inc. deposits all cash receipts on the day they are received and it makes all cash payments by check. On the close of business on June 30, its book cash balance is a $27,500 debit. The company's June 30th bank statement shows $25,800 on deposit in their bank. There must be a bank reconciliation, and any corresponding journal entries needed, for the company using the following information:

a. June 30 bank statement has $100 in bank service charges. The company has not yet recorded this expense onto their books

b. Outstanding checks as of June 30 total $5,600

c. June 30th cash receipts of $6,200 were placed in the banks night depository box and are not recorded on the bank statement

d. A $40 check written by Titans Inc. was mistakenly drawn against Smith Incs account

e. The bank statement shows a $600 NSF check from a customer you collected from. The company has not yet recorded this NSF check.