Part 4 Questions Consider the following transactions from

Part 4 Questions

Consider the following transactions from Big Marker’s accounting information system. 

1. Accrued one month’s interest on an existing note payable, $300
2. Billed 30 communities for monthly dues of $600
3. Borrowed $10,000 from First National Bank within a 6-month, 4% note payable
4. Created a Chief Financial Officer position and established a support team for that function. The CFO’s annual salary will be $150,000; each support team member will earn $60,000 annually. 
5. Depreciated computer servers, $8,000
6. Hired a new employee for the Development Team. The new employee’s salary will be $45,000 annually.
7. Paid six months’ rent in advance, $12,000.
8. Purchased new computer servers from Dell, $40,000
9. Reimbursed employees for business expenses: Supplies, $500, Travel, $1,500.
10. Took an inventory of supplies on hand, which revealed $450 supplies used. 

Questions:

1. Which business process is most closely associated with each transaction?
2. What is the appropriate journal entry (if an) to record the transaction in Big Marker’s AIS?
3. Which element of financial statements are represented in the journal entry?
4. What forms/documents would be used to process each transaction?
5. For each transaction, suggest at least two additional pieces of information you would want to capture in a relational database.
6. For each transaction, suggest two internal controls you would implement. Justify your response. 

Here is an example:

Transaction: Big Marker purchased supplies on account, $100.

Business Process: Acquisition/payment

Journal entry: Debit Supplies $100, Credit Accounts payable $100.

Elements: Supplies is an asset; accounts payable, a liability.

Forms: Purchase requisition and purchase order. 

Additional information: name of the primary contact person at the vendor, specific type and quantity of supplies purchased (e.g. 10 boxes of paper clips)

Internal Controls: transaction authorizations would ensure that only the Purchasing department can issue purchase orders. Sending a bling copy of the PO to the Receiving department would aid in the segregation of duties.