Q1- A. What is a bank reconciliation and why is it important for companies to do it
Question:
Q1-
A. What is a bank reconciliation and why is it important for companies to do it periodically?
B. MAKE 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)