Module 7 Assignment: Accounts Receivable, Accounts Payable, and Internal Controls

In this assignment, you will apply the concepts learned in Module 7 by recording accounts receivable and accounts payable transactions, managing these accounts, and implementing internal controls. Follow the steps below to complete your assignment.

1. Record Accounts Receivable Transactions:
   • Using the accounting simulator, issue and record invoices for three hypothetical customers.
   • Ensure each invoice includes all necessary details such as invoice number, date, customer information, description of goods/services, amount due, and payment terms.
   • Generate journal entries for each invoice and record them in the accounting system.
2. Manage Accounts Receivable:
   • Create an aging report for the recorded invoices.
   • Identify any overdue invoices and outline a plan for collection actions.
3. Record Accounts Payable Transactions:
   • Record three vendor invoices in the accounting simulator, ensuring each invoice includes all necessary details such as invoice number, date, vendor information, description of goods/services, amount due, and payment terms.
   • Generate journal entries for each invoice and record them in the accounting system.
4. Manage Accounts Payable:
   • Create a schedule for paying the recorded vendor invoices.
   • Identify any early payment discounts and calculate the savings for each eligible invoice.
5. Implement Internal Controls:
   • Develop a segregation of duties chart for managing accounts receivable and accounts payable. Include at least three tasks and assign them to different hypothetical employees.
   • Outline a formal credit approval process for new customers and an invoice approval process for vendor invoices.
6. Submit Your Work:
   • The accounting simulator allows you to export recorded transactions, aging reports, payment schedules, and internal control documentation as PDF files.
   • Submit the PDF files via the course submission portal.

Additional Activities

To reinforce your understanding, complete the following additional activities:

• Discussion Post: In the course forum, post a brief summary of your experience managing accounts receivable and accounts payable and implementing internal controls. Highlight any challenges you faced and how you overcame them.
• Peer Review: Review at least two of your classmates’ submitted aging reports and payment schedules and provide constructive feedback on their work. Pay special attention to the entries’ accuracy and the reports’ completeness.
• Reflection: Write a one-page reflection on the importance of internal controls in managing receivables and payables and how these controls contribute to the overall financial management of a business.

For this assignment, you may use the following free accounting simulator:

AccountingCoach Simulator

If you have any questions or need further assistance, please reach out to your instructor or post in the course forum.

Due Date: One week after completing this module.