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ACC 101

Q1-

A. What is a bank reconciliation and why is it important for companies to do it periodically?

B. Prepare a Bank Reconciliation Statement for XYZ company that has:

• Bank statement of SR10,000.

• Cash account of SR7,500.

Additional information for the reconciliation:

• Deposit in transit.
• NSF Check.
• Outstanding check.
• Collections made by the bank.

Required: provide an amount of each information to bring the adjusted balances to be equal. (2marks)

Q2-

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

Give any amount of sales and prepare the journal entry using the percent of sales method to account for bad debt. (1mark)

Q3-

ABC company thinks that implementing good internal control is not that important. Your job is to convince the management team to implement it. What would be your advice? (2marks)