Question

Home Repair Corp. (HRC) operates a building maintenance and repair business. The business has three office employees-a sales manager, a materials/crew manager, and an accountant. HRC's cash payments system is described below Required: 1. For each statement (a-(7), identify the internal control principle being applied After a contract is signed with a customer, the sales manager prepares a prenumbered purchase requisition form that indicates the materials needed for the work at the repair site. Based on the purchase requisition form, the materials/crew manager prepares and sends a prenumbered b. purchase order to suppliers of materials, advising them of the specific materials needed and the repair site to which they should be delivered c. The materials/crew manager is the only employee authorized to order goods. Upon receiving a supplier's invoice, the accountant compares it to terms indicated on the purchase order, not particular the prices charged and quantities ordered of these documents are in agreement, the accountant prepares a prenumbered check, stamps the e. and prepares a journal entry to record the payment. The journal entry explanation references number on the purchase order. HRC's owner prepares a monthly bank reconciliation and reviews checks returned with the bar ensure they have been issued to valid suppliers. 92 TTTT E 3139

Answer 1

1)

A.	Document Procedure
B	Segregate Duties
C	Establish Responsibility
D	Independently Verify
E	Document Procedure
F	Independently Verify

3) There was no way to independently verify that the amount charged by suppliers were for good that had been delivered to authorised work site.