Problems
1. After we consider the delay of depositing cash, next we turn our attention into how deposits are recorded and then taken to the bank for deposit. What steps do we need to take to insure that all deposits are recorded and that the actual deposit is taken to the bank?
2. The cash area is one of the most highly audited (and watched) item on the balance sheet for the reasons stated in your discussion question this week. Consider some of the more important cash receipt processing items. For example: are receipts deposited daily, intact, and without delay? Why is delay so important to monitor?
3. Besides the early pay discount entries, I would also like us to consider the end of month accruals that go with accounts receivable. What else do we do at the end of the month to make sure we are listing our A/R at the net realizable value?
4. How do we know how much bad debt we should estimate and post at the end of each monthly period? What goes into our calculations on the allowance for bad debt?