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Using a word processing program, write a two to three paragrahs page response the this. Brown Company provides office support services for more than 100
Using a word processing program, write a two to three paragrahs page response the this.
Brown Company provides office support services for more than 100 small clients. These services include supplying temporary personnel, providing monthly bookkeeping services, designing and printing small brochures, copying and reproduction services, and preparing tax reports. Some clients pay for these services on a cash basis, some use thirty-day charge accounts, and others operate on a contractual basis with quarterly payments. Brown's new office manager was concerned about the effectiveness of control procedures over sales and cash flow. At the manager's request, the process was reviewed by conducting a walkthrough. The following facts were identified. Review the identified facts (listed as A through L) and complete the following. a. What is a walkthrough, and why would it be useful for assessing controls over sales and cash flow? b. List at least eight elements of ineffective internal control at Brown Company. c. List at least six elements of effective internal control at Brown Company. A. Contracts were written by account executives and then passed to the accounts receivable department, where they were filed. Contracts had a limitation (ceiling) on the types of services and the amount of work covered. Contracts were payable quarterly in advance. B. Client periodic payments on contracts were identified on the contract, and a payment receipt was placed in the contract file. C. Periodically, a clerk reviewed the contract files to determine their status. D. Work orders relating to contract services were placed in the contract file. Accounting records showed Debit Cost of Services; Credit Cash or Accounts Payable or Accrued Payroll entry. E. Monthly bookkeeping services were usually paid for when the work was complete. If not paid in cash, a copy of the financial statement (marked "Unpaid ") was put into cash-pending file. It was removed when cash was received, and accounting records showed Debit C.' ash; Credit Revenue entry. F. Design and printing work was handled like bookkeeping's work. However, a design and printing order form was used to accumulate costs and compute the charge to be made to the client. A copy of the order form served as a billing to the client and, when cash was received, as a remittance advice. G. Reproduction (copy) work was generally a cash transaction that was rung up on a cash register and balanced at the end of the day. Some reproduction work was charged to open accounts. A billing form was given to the client with the work, and a copy was put in an open file. It was removed when paid. In both cases, when cash was received, the accounting entry was Debit Cash; Credit Revenue. H. Tax work was handled like the bookkeeping services. I. Cash from cash sales was deposited daily. Cash from receipts on account or quarterly payments on contracts was deposited after being matched with the evidence of the receivableStep by Step Solution
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