Question

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• The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
• Assignments submitted through email will not be accepted.
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• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
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• All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.

Assignment Question(s):                                                     

Q1-

A company wants to implement good internal control. What are the policies and procedures you can suggest to minimize human frauds and errors? (1Mark)

Q2-

Assume that you have a company. And the management team estimates that 3% of sales will be uncollectible.

Give any amount of sales and prepare the journal entry using the percent of sales method. (1Mark)

Q3-

A company that uses a perpetual inventory system made the following cash purchases and sales. There was no beginning inventory.

January 1:	Purchased 30 units at SAR11 per unit
February 5:	Purchased 30 units at SAR 13 per unit
March 16:	Sold 50 Units for SAR 15 per unit

A.Prepare general journal entries to record the March 16 sale using the

1. FIFO inventory valuation method.
2. LIFO inventory valuation method.
3. Weighted average valuation method.

B. What is the cost of goods sold and the gross margin for each method? (2Marks)

Q4. What is the bank reconciliation? why is it important for companies to prepare bank reconciliation periodically? (1Mark)

Answer 1

Q1. Following are the procedure and policies-

1. Reconiciliation of bank accounts regularly.
2. Provide board of directors oversight of agency operations and management.
3. Creating awareness among employees about the risk and frauds.

Q2.
Let the sales be $10000. Therefore, uncollectible sales=$300 (3% of 10000).
Journal Entry-

Bad debt Expense $300(Debit)
Accounts Receivables $300(Credit)   

Q3.
A. Journal Entries
B. Cost of goods sold and gross margin

Q4.

A bank reconciliation is a form that helps individuals, ompanies, firms to compare their own bank records with the bank's record.
The importance of bank reconciliation are-

• Error and Omission correction- Any Transaction omitted or wrong figures used while recording are easy to determine and act accordingly.
• Precisely records transaction- Even the small amount of interest earned is recorded so that exact values can be recorded in financial statments.