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You are the controller for an architectual firm whose accounting year ends on December. As part of the management team, you receive a year-end bonus directly related to the firms' earnings for the year. One of your duties is to review that transactions recorded by the bookkeepers. A new bookkeeper recorded the receipt of $10,000 in cash as an increase in cash and an increase in service revenue.

The $10,000 is a deposit and the bookkeeper explains to you that the firm plans to provide the services to the client in March of the following year.

Required:

a. Did the bookkeeper correctly record the client's deposit? Explain.

b. What would you do as controller for the firm? Do you have a responsibility to do anything to correct the books? Explain.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9987061

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