Acc280 Week Five Ind Assignment

Chapter 7

Question 1 (a): What are generally accepted accounting principles (GAAP)?

The Generally Accepted Accounting Principles (GAAP) are actually an accumulated rules and or requirements with authoritative assistance and accepted as an overall manual for fiscal and financial reporting.

Question 1 (b): What bodies provide authoritative support for GAAP?

Federal accounting standards board (FASB)and Securities and Exchange Commission (SEC)

Question 2: What elements comprise the FASB’s conceptual framework?

Set of objectives for financial reporting with goals of fiscal coverage

Qualitative characteristics of accounting information

Components of fiscal documents or financial statements

Operating guidelines through working Tip (assumptions, rules and limitations)

Chapter 8

E8-5

Procedure 1. Several individuals operate the cash register using the same register drawer.

Internal Control? Weak

Related Internal Control Principle: Establishment of responsibility

Procedure 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.

Internal Control? Good

Related Internal Control Principle” Independent interval verification

Procedure 3. Ellen may write checks and also records cash payment journal entries.

Internal Control? Weak

Related Internal Control Principle: Segregation of duties

Procedure 4. One individual orders inventory, while a different individual authorizes payment.

Internal Control? Good

Related Internal Control Principle: Segregation of duties

Procedure 5. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording.

Internal Control? Weak

Related Internal Control Principle: Documentation Procedures.

E15-1

December 31, 2009 December 31, 2008

Current assets $125,000 $100,000

Plant...