Assignment on Adjusting Entries

Submitted to: Umme Humaira

CIU School of business

Submitted by:
Mashroor Hossain
19201002

Submitted on:3rd April 2020

1.
Adjusted Journal Entries of the Shams Beauty Care Company on the month of April.
a. Insurance expense DR300 (3600/12=300)
Prepaid insurance CR300

b. Depreciation of equipment DR500

Accumulated depreciation CR500

c. Interest Expense DR200(20000*12%=2400/12=200)

Interest Payable CR200

d. Unearned Service revenue DR200

Service revenue CR200 (1200/6=200)

e. Accounts receivable DR1800

Service Revenue CR1800

2. Adjusted entries for Samanta Company on December 31st.

a. Accounts Receivable DR2000
Service Revenue CR2000

b. Supplies expense DR600

Supplies CR600

c. Utility Expense DR205

Accounts Payable CR205
 d. Unearned service revenue DR600
Service revenue CR600

e. Salaries expense DR1800

Salaries Payable CR1800

f. Insurance expense DR250

Prepaid insurance CR250

3. Fraud Triangle

The Fraud triangle is a framework designed to explain the reasoning behind a worker’s decision
to commit workplace fraud. The three stages, categorized by the effect on the individual, can be
summarized as pressure, opportunity and rationalization. Broken down, they are:

● Step 1 – the pressure on the individual – is the motivation behind the crime and can be
either personal financial pressure, such as debt problems, or workplace debt problems,
such as a shortfall in revenue. The pressure is seen by the individual as unsolvable by
orthodox, legal, sanctioned routes and unshakeable with others who may be able to offer
assistance. A common example of a perceived unshakeable financial problem is gambling
debt. Maintenance of a lifestyle is another common example.
● Step 2 – the opportunity to commit fraud – is the means by which the individual will
defraud the organization. In this stage the worker sees a clear course of action by which
they can abuse their position to solve the perceived unshakeable financial problem in a
way that – again, perceived by them – is unlikely to be discovered. In many cases the
ability to solve the problem in secret is key to the perception of a viable opportunity.
● Step 3 – the ability rationalizes the crime – is the final stage in the fraud triangle. This
is a cognitive stage and requires the fraudster to be able to justify the crime in a way that
is acceptable to his or her internal moral compass. Most fraudsters are first-time criminals
and do not see themselves as criminals, but rather a victim of circumstance.
Rationalizations are often based on external factors, such as a need to take care of a
family, or a dishonest employer which is seen to minimize or mitigate the harm done by
the crime.