Homework Answers
1.
Answer is b. The mail clerk gives checks and money orders to the
person who makes bank deposit
2.
Answer is b. segregation of duties
Since cash count sheet prepared is cross checked with physical
count of cash
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Which of the following is an internal control for checks received through the mail? Multiple Choice...
Reference the narrative for Figure 3-12(picture 1) to complete picture 2 the missing labels and data flows. ...
Reference the narrative for
Figure 3-12(picture 1) to complete picture 2 the missing labels and
data flows.
3.12 Charting, Inc., a new audit client of yours, processes its sales and cash receipts documents in the following manner: 1 Payment on account. Each morning a mail clerk in the sales department opens the mail. The mail clerk prepares a remittance advice (showing customer and amount paid) if one is not received. The checks and remittance advices are then for warded to...
Refer to the system flowchart and identify the internal control risks represented in it: Mail Room...
Refer to the system flowchart
and identify the internal control risks represented in it:
Mail Room Clerk 1 Mail Room Clerk 2 Accounts Receivable Department Remittance Advice Check Remittance Advice Check Check Remittance List Remittance Advice AR Sub Ledger Open Mail and Reconcile Remit advice and Check Prepare Remittance List Distribute RA and Checks Reconcile, Record in Journal, and Accounts, Deposit Cash Cash Receipts Journal Remittance Advice Check Remittance List AR Control GL Cash Check Remittance List Remittance Advice Deposit...
Sales Order Processing System The customer sales order is received via phone or through the mail. Gus Grinwich, the sales clerk, receives the sales order and checks the customer’s credit record. Once...
Sales Order Processing System The customer sales order is received via phone or through the mail. Gus Grinwich, the sales clerk, receives the sales order and checks the customer’s credit record. Once Grinwich checks the customer’s credit record, he prepares the sales order. From this sales order, Grinwich prepares a customer copy, stock release, shipping notice, two copies of the invoice, ledger copy, packing slip, and the file copy. One of the invoice copies, the ledger copy, and the file...
Part 1: The following procedures were recently installed by Raspberry Creek Company: After necessary approvals have...
Part 1: The following procedures were recently installed by Raspberry Creek Company: After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing. The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer's office for...
5. At the end of each day, all cash receipts are placed in the bank's night depository. 6. At the end of each day, an a...
5. At the end of each day, all cash receipts are placed in the bank's night depository. 6. At the end of each day, an accounting clerk compares the duplicate copy of the daily cash deposit slip with the deposit receipt obtained from the bank. 7. All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares a listing of the cash receipts and forwards a copy of the list to the...
10. Which of the following describes the environment in internal control? A) Internal auditors monitor company con...
10. Which of the following describes the environment in internal control? A) Internal auditors monitor company controls to safeguard assets, and external auditors Page 2 of 4 monitor the controls to ensure that the accounting records are accurate, B) The environment is the "tone at the top of the business. C) The environment is designed to ensure that the business earns profit. D) A company must identify its risks 11. Rearranging plain-text messages by a mathematical process is known as...
The proper segregation of duties is an important control activity in all businesses. Analyze the following...
The proper segregation of duties is an important control activity in all businesses. Analyze the following scenario to properly apply the concepts of segregation of duties. The cashier of Blanchard Industries opens the mail containing customer payments. He then performs the following procedures Makes a list of all payments received Prepares a deposit slip and takes the deposit to the bank Records the cash received in the customer account records Makes any necessary adjustments to customer account records to correct...
Current Attempt in Progress The following control procedures are used in Keaton Company for over-the-counter cash...
Current Attempt in Progress The following control procedures are used in Keaton Company for over-the-counter cash receipts (a) For each procedure, explain the weakness in internal control and identify the control principle that is violated. Weakness Procedure Principle Violated 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. Cashiers are not bonded and background checks are not conducted Cash is not adequately protected from theft Inability to establish...
The Internal Audit Director has asked you to document the cash receipts system (which includes updating...
The Internal Audit Director has asked you to document the cash receipts system (which includes updating of A/R) at FreeFall, Inc A narrative of the system follows: FreeFall, Ine sells parachutes. An individual may come into the office and buy directly. When the customer comes to the office, they pay at time of purchase by cash or check. Other orders are made by mail and receipts come into the mailroom. Only checks are received by mail. In most cases, a...
3) Answer the following 5 multiple Choice 1) The objectives of internal control are to a....
3) Answer the following 5 multiple Choice 1) The objectives of internal control are to a. provide reasonable assurance that assets are safeguarded and used for ess purposes, financial reports are accurate, and laws and regulations are complied with Ob. provide control over "internal use only" reports and employee internal conduct OC. control the internal organization of the Accounting Department personnel and equipment O d. prevent fraud and promote the social interest of the company 2) A bank reconciliation should...
Reference the narrative for
Figure 3-12(picture 1) to complete picture 2 the missing labels and
data flows.
3.12 Charting, Inc., a new audit client of yours, processes its sales and cash receipts documents in the following manner: 1 Payment on account. Each morning a mail clerk in the sales department opens the mail. The mail clerk prepares a remittance advice (showing customer and amount paid) if one is not received. The checks and remittance advices are then for warded to...
Refer to the system flowchart
and identify the internal control risks represented in it:
Mail Room Clerk 1 Mail Room Clerk 2 Accounts Receivable Department Remittance Advice Check Remittance Advice Check Check Remittance List Remittance Advice AR Sub Ledger Open Mail and Reconcile Remit advice and Check Prepare Remittance List Distribute RA and Checks Reconcile, Record in Journal, and Accounts, Deposit Cash Cash Receipts Journal Remittance Advice Check Remittance List AR Control GL Cash Check Remittance List Remittance Advice Deposit...
Part 1: The following procedures were recently installed by Raspberry Creek Company: After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing. The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer's office for...
5. At the end of each day, all cash receipts are placed in the bank's night depository. 6. At the end of each day, an accounting clerk compares the duplicate copy of the daily cash deposit slip with the deposit receipt obtained from the bank. 7. All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares a listing of the cash receipts and forwards a copy of the list to the...
10. Which of the following describes the environment in internal control? A) Internal auditors monitor company controls to safeguard assets, and external auditors Page 2 of 4 monitor the controls to ensure that the accounting records are accurate, B) The environment is the "tone at the top of the business. C) The environment is designed to ensure that the business earns profit. D) A company must identify its risks 11. Rearranging plain-text messages by a mathematical process is known as...
The proper segregation of duties is an important control activity in all businesses. Analyze the following scenario to properly apply the concepts of segregation of duties. The cashier of Blanchard Industries opens the mail containing customer payments. He then performs the following procedures Makes a list of all payments received Prepares a deposit slip and takes the deposit to the bank Records the cash received in the customer account records Makes any necessary adjustments to customer account records to correct...
Current Attempt in Progress The following control procedures are used in Keaton Company for over-the-counter cash receipts (a) For each procedure, explain the weakness in internal control and identify the control principle that is violated. Weakness Procedure Principle Violated 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. Cashiers are not bonded and background checks are not conducted Cash is not adequately protected from theft Inability to establish...
3) Answer the following 5 multiple Choice 1) The objectives of internal control are to a. provide reasonable assurance that assets are safeguarded and used for ess purposes, financial reports are accurate, and laws and regulations are complied with Ob. provide control over "internal use only" reports and employee internal conduct OC. control the internal organization of the Accounting Department personnel and equipment O d. prevent fraud and promote the social interest of the company 2) A bank reconciliation should...
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