Acc 225 Week 8 Assignment 4

QS 8-6 Bank reconciliation P3 1. For each of the following items, indicate whether its amount (i) affects the bank or book side of a bank reconciliation and (ii) represents an addition or a subtraction in a bank reconciliation: a. Outstanding checks Affects banks side and is a subtraction b. Debit memos Affects the book side and are subtractions c. NSF checks Affects book side and are subtractions d. Unrecorded deposits Affects book side and are additions, outstanding deposits affect the bank side and are additions e. Interest on cash balance Affects book side and are additions f. Credit memos Affects book side and are additions g. Bank service charges Affects book side and are subtractions 2. Which of the items in part 1 require an adjusting journal entry? Usually interest and bank services charges would need adjusting entries when the bank reconciliation is complete. But, NSF Checks and their fees, debit memos, and credit memos would need adjusting entries if the bank did not send notice of these transactions in advance. Entries for NSF checks and their fees, debit memos, and credit memos

BTN 5-3 Amy Martinez is a student who plans to attend approximately four professional events a year at her college. Each event necessitates a financial outlay of $100–$200 for a new suit and accessories. After incurring a major hit to her savings for the first event, Amy developed a different approach. She buys the suit on credit the week before the event, wears it to the event, and returns it the next week to the store for a full refund on her charge card. Required 1. Comment on the ethics exhibited by Amy and possible consequences of her actions. 2. How does the merchandising company account for the suits that Amy returns? I think she has poor ethics. By her doing the practice of buying, wearing, and returning, she could possibly speed up the process of prices being raised, in order to account for having to discount perfectly good products, just because she didn’t want to pay for what she needs. This in turn could set off a chain of events, such as; she returns a good product, that product needs to be

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