Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March:

Opened a business bank account with a deposit of $50,000 from personal funds.

Purchased supplies on account, $4,000.

Paid creditors on account, $2,300.

Received cash from fees earned on insurance commissions, $13,800.

Paid rent on office and equipment for the month, $5,000.

Paid automobile expenses for month, $1,150, and miscellaneous expenses, $300.

Paid office salaries, $2,500.

Determined that the cost of supplies on hand was $2,700; therefore, the cost of supplies used was $1,300.

Billed insurance companies for fees earned for commissions, $12,500.

Withdrew cash for personal use, $3,900.

Required:

1. Indicate the effect of each transaction and the balances after each transaction. 2. Determine the net income for March.

3. March's transactions increased or decreased Amy Austin's capital to?

Insurance companies have internal controls in place to protect assets, monitor the accuracy of accounting records and encourage operational efficiencies and adherence to policies. these internal controls are generally of two types: administrative controls and accounting controls. administrative controls are the policies and procedures that guide the daily actions of employees. accounting controls are the policies and procedures that delineate authorizations of financial transactions that are done, safeguard assets, and provide reports on the company’s financial status in a reliable and timely manner. internal controls should include both preventative and detective controls. the purpose of preventative controls is to stop problems and errors before they occur. detective controls identify problems after they have occurred. preventative controls are usually more effective at reducing problems, but they also tend to be more expensive. internal controls must be flexible to adjust for changes in laws and regulations in addition to adding new products or modifying current ones. companies must also do regular analyses to ensure that the benefits of implementing the controls are worth their costs. when concerned about paying unwarranted insurance claims which type of control would be useful?