ACC $201$ Module Four Journal Guidelines and Rubric

Overview

Internal controls are methods and strategies used to keep information and inventory safe from theft and to easily tell if something is compromised or missing. In this journal, recommend internal controls for safeguarding inventory from an accounting perspective and explain which financial statements are affected by missing inventory.

Scenario

One of your friends has opened a new wholesale electronics business and is asking for your help figuring out some inventory issues they are facing.

One night last week, there seemed to be fewer HD televisions in the warehouse than they expected. The last time they were in the warehouse was a week earlier, and they hadn$$t noticed anything amiss.

As they looked around, the evening warehouse worker was filling the last orders of the day. The delivery driver and day warehouse worker were gone for the day, and the delivery van keys were on the desk that the warehouse workers share. The doors to the loading dock were open, as was the door to the office area where the accountant, two customer service specialists, and the owner work.

Knowing that you are familiar with accounting principles, they asked for your help in figuring out how to prevent this in the future.

Directions

Reflect on what you have learned about internal controls to provide your recommendations on what controls the business owner should put in place to prevent loss of inventory and ensure that any losses are reported immediately. Also, specify which parts of the financial statements are affected by these losses.

Specifically, you must address the following rubric criteria:

Role of Internal Controls

Explain the role of internal controls in business settings. Also explain how lack of internal controls can impact the ability to accurately analyze any wrongdoing.

Recommendations

Recommend and reflect on at least two internal controls that should be put in place to prevent $$missing$$ inventory, noting any assumptions you are making about the root cause of the missing products and how your recommendations will help address them.Recommend at least one control that should be put in place to alert the owner if something is actually missing.

Financial Statements

If you were to find that two $$400$ HD televisions were missing, explain what the journal entry would be to record the theft and which financial statements would be affected.

What to Submit

Submit a $3-$to $5-$paragraph Microsoft Word document with $12-$point Times New Roman font, double spacing, and one$-$inch margins that addresses the role of internal controls and recommendations for additional internal controls for the prompt provided.