Overview
Q1 : On December first, a customer borrows 150,000 SAR from a local bank, agreeing to pay 13% interest, with the note due in 5 years.
Prepare the journal entries in the books of the customer and the local bank on the date of borrowing and record the interest accrual for December.
Q2: On January 1, 2024, a company purchased equipment for 200,000 SAR.
The equipment has an estimated useful life of 5 years and no residual value.
The company uses the Double-Declining Balance Depreciation method.
- Compute the depreciation expense for 2024 and 2025.
- Prepare the journal entries for both years
Q3: A company's cashier is responsible for receiving cash, recording the cash receipts in the accounting system, and depositing the amounts into the bank. During an internal review, it was discovered that some cash receipts recorded in the system were never deposited in the bank.
- Identify the internal control weakness present in this situation.
- Explain how this issue could lead to fraud.
- Recommend two internal control procedures to correct the problem.