ComputersPutin
All Star
Right. So.....I think you would have to debit a Suspense account. Then when you are able to identify the transaction you will clear the suspense account by crediting it and debiting the correct account.
My Accounting brehs, a little help needed
- Thread starter -InFeRnO-
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Right. So.....I think you would have to debit a Suspense account. Then when you are able to identify the transaction you will clear the suspense account by crediting it and debiting the correct account.
aight yall sorry for the lack of info
it's a corporation started up on April 1st and accounting is only required for the first month of operations
the business is a "bike sharing" system set up within a downtown core.. based entirely off service revenue
i can upload the case if you guys want, but basically i've gone through every single source document and there were only two expenses paid in cash.. every other expense was covered by the cheques seen in the bank statement
the expenses paid by cash were $665 worth of office supplies purchased on April 1st (that's too much money to be a petty cash purchase, right?) and a collection of gas receipts throughout the month that totaled up to $530
other than that, there were no other purchases made by cash throughout the month, and yet $3000 was withdrawn at two separate times during the month
i'm trippin i swear there shouldn't even be straight cash withdrawals from a corporate bank account...
We are getting closer. You said you need to journalize the transactions on the bank statement. It's obvious that this cash withdrawal is problematic if there is no support documentation within this case study.
This leads me to ask what is the nature of the case study? Fraud detection? The need for supporting documentation?
Are you expected to create your own scenarios?
Aside from journalizing the transaction, what is the nature of the case study?
In general, case studies would be about more than merely doing accounting work...there seems to be a broad principle you are being asked to build upon.
simple stuff... the actual objectives are to analyze the case, pick out which information is of accounting significance, then use that info to infer what transactions occured and journalize those transactions as accurately as possible.... there isn't a chart of accounts given, we have to create our own.. then we just gotta post to t-accounts, create a trial balance, income statement, and balance sheet
we're not specifically doing fraud detection or anything like that. it's just an introductory accounting course
there's pretty much no supporting information for the $3000 withdrawals.. all that's given is the bank statement showing the withdrawals, and then various expense receipts, with only the gas and supplies expenses being paid for by cash like i said
ComputersPutin
All Star
Suspense account. If its wrong...im sure you can explain why you used it. The Teacher should show mercy.
Okay.
Well, do not let the $3000 hold you back from doing all that you said above. Journalize the transaction as a cash withdrawal and move on.
In your written analysis, you can demand that future cash withdrawals are substantiated with better source documentation.
Do not let these two transactions distract you from completing the assignment.
is a suspense account just a temp account for transactions that are unclear? so i would credit cash and debit suspense?
how would that work out on the income statement?
good looks breh
i've already journalized everything, just went back to review these withdrawals because i felt they were wrong
gonna get started on the financial statements now
ComputersPutin
All Star
Yea..suspense is a balance sheet account for transactions that can't be determined at the moment. You put it there because a balance there would indicate something that was undetermined...and will jump out to you or anyone looking at the financials..instead of burying it in misc. expense or income on the income statement with legit transactions. Eventually i guess if you never can determine what it is...then you show it as some other income or misc expense on the income statement.
Brown_Pride
All Star
first off that shyt would send up ALL TYPES of red flags. 15 % of your starting money just get's sucked out the bank with not so much as a sticky note? Suspect. Cash should not be coming directly out an operating account like this. Expense type accounts usually have their own account and are replenished like petty cash.
Looking at the account it's tied to a credit card machine of some type, where there any upfront cost associated with that that maybe fees were set up to come out automatically? I know some credit card companies insist on having a reserve in case people cancel their orders, especially if you're in the "service" industry.
No where in your other paperwork are there talks of needing to pay deposits for anyting? Rent? maybe.
If there really is nothing you then shove it on suspense and write something about controls needing to be created to prevent theft.
Looking at the account it's tied to a credit card machine of some type, where there any upfront cost associated with that that maybe fees were set up to come out automatically? I know some credit card companies insist on having a reserve in case people cancel their orders, especially if you're in the "service" industry.
No where in your other paperwork are there talks of needing to pay deposits for anyting? Rent? maybe.
If there really is nothing you then shove it on suspense and write something about controls needing to be created to prevent theft.
ComputersPutin
All Star
Props to my accounting brehs!.....Im doing audits....right now....long day.