Bookkeeper

It is your second week on a new job as a bookkeeper at Mags and Bags, a small boutique store. While you’re enjoying the challenge, you’ve found a few things that don’t add up after completing some of the transactions in the store’s computerized accounting system. Store owner Margaret Posley has given you a trial balance from the end of last month. She says that her CPA told her to use it to compare to her account balances for accuracy. The bookkeeping and recordkeeping functions have not been Margaret’s favorite task as an owner, as she doesn’t understand the information. It has caused accuracy to suffer.

Instructions:

Begin with the template provided here:

Complete a brief analysis of what the current account balances are, and what they are should be according to Margaret’s CPA. Show your calculations in the gray area in column G.After your analysis, address the following questions in the Error Correction Template:

1. Identify which accounts are in error, and how they are related to each other.
2. Discuss the likely causes of the errors (omission, duplication, incorrect transaction date, etc.).
3. Looking forward, what tools will you use and actions will you take to ensure these errors don’t continue to be an issue in the company records?
4. Draft a brief response to Margaret sharing your findings and plan for how you will correct the errors in the computerized accounting software. Be specific in your findings and recommendations for correction. Include suggestions for how these types of errors can be avoided in the future.

5. Module 02 Assignment
   Instructions: Complete a brief analysis of what the current account balances are, and what they
   should be according to Margaret’s CPA. Complete column G (Difference Analysis).
   Mags and Bags				Mags and Bags		Difference Analysis
   Trial Balance				Trial Balance-CPA Version
   Account Number	Account	Debit	Credit	Debit	Credit
   101	Checking	10,000		10,080
   105	Accounts Receivable (A/R)	4,200		4,600		-400
   115	Merchandise Inventory	15,000		14,800		200
   125	Prepaid Insurance	6,000		6,000
   135	Vehicle	25,000		25,000
   137	Accumulated Depreciation		5,000		5,000
   201	Accounts Payable (A/P)		2,200		2,200
   205	Loan Payable		0		0
   301	Common Stock		37,520		37,520
   318	Retained Earnings		12,000		12,000
   401	Sales		26,000		26,400	-400
   501	Cost of Goods Sold	13,000		13,200		-200
   601	Advertising	2,500		2,500
   603	Bank Charges	60		60
   607	Depreciation Expense	5,000		5,000				EXAMPLE Sale on Account:		Debit	Credit
   609	Freight & Delivery	130		280				Accounts Receivable		100
   611	Insurance	0		0				Sales			100
   621	Office Supplies	248		0				Cost of Goods Sold		50
   625	Repair & Maintenance	140		60				Merchandise Inventory			50
   627	Shipping and delivery expense	592		442				***Hint: Cost of goods sold is half of the selling price of inventory
   629	Stationery & Printing	500		748
   633	Telephone Expense	120		200
   635	Utilities	230		150
   		82,720	82,720	83,120	83,120
   Address the following questions fully and completely. Use the details of your analysis above to
   justify your responses. Write in complete sentences, and pay attention to spelling and grammar.