Answer:
1) October 1:
1.1
Debit Cost of Goods sold $3,600
Credit Merchandise $3,600
1.2
Debit Cash $6,000
Credit Revenue $6,000
2) October 7
2.1.
Debit Revenue $670
Credit Cash $670
2.2.
Debit Merchandise $402
Credit Cost of Goods sold $402
Explanation:
1. October 1: when sold goods, the company recorded Cost of Goods sold and revenue:
1.1
Debit Cost of Goods sold $3,600
Credit Merchandise $3,600
1.2
Debit Cash $6,000
Credit Revenue $6,000
2. October 7
The percentage of revenue that merchandise returned = $670/$6,000 = 11.17%
Assume a constant gross profit ratio for all items sold.
Cost of returned merchandise = $3,600 x 11.17% = $402
2.1.
Debit Revenue $670
Credit Cash $670
2.2.
Debit Merchandise $402
Credit Cost of Goods sold $402
The separating of recordkeeping from the custody of assets a limitation of an internal control system because:
- In example above, fraud could occur only if the two employees collude (agree to work together to commit fraud)
- Employee maintaining accounting records has no incentive to falsify records.
- Employee controlling asset will know if another person is maintaining records or not.
- The employee who controls/has access to an asset should not maintain that asset's accounting records.
<h3>
What is meant by Internal Control?</h3>
- Internal controls are the mechanisms, rules, and procedures implemented by a corporation to ensure the integrity of financial and accounting information, promote accountability, and stop fraud.
- Internal controls can help improve operational efficiency by improving the accuracy and timeliness of financial reporting, besides complying with laws and regulations and preventing employees from stealing assets or committing fraud.
To learn more about asset's accounting records: brainly.com/question/24012821
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Answer:
I used an excel spreadsheet since there is not enough room here.
Explanation:
Kids' Corner, a toy store, ordered a supply of stuffed toys from Toyland Inc. The toys were supposed to be delivered on the 1st of December but were sent to Kids' Corner on the 5th of December. There has been a(n) _____ of contract.
A. compensatory breach
B. anticipatory breach
C. material breach
D. concurrent breach
<u>Correct Option:</u>
There has been a <u>material breach</u> of contract.
<u>Option: C</u>
<u>Explanation:</u>
A contract law concept that applies to a non-performance under the contract that is sufficiently serious to give the grieved party the right to sue for contravention of the contract, is understood as a material break or infringement.
If a substantive violation has occurred, the aggrieved party is therefore deprived of a contractual duty to further results. Here the Kids' Corner toy store ordered a supply of stuffed toys from Toyland Inc. but received order in delay date, which is considered as material breach due to late delivery of expected material.
