Listed below are five procedures followed by Gilmore Company.
Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below.
Employees are required to take vacations.
Any member of the sales department can approve credit sales.
Paul Jaggard ships goods to customers, bills customers, and receives payment from customers.
Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities.
Time clocks are used for recording time worked by employees.
Homework Answers
1. good- human resource controls
2. weak- establishment of responsibility
3. weak- segregation of duties
4. good- independent internal verification
5. good- physical controls
Exercise 8-06 Listed below are five procedures followed by Gilmore Company. 1. Employees are required to...
Exercise 8-06 Listed below are five procedures followed by Gilmore Company. 1. Employees are required to take vacations. 2. Any member of the sales department can approve credit sales. 3. Paul Jaggard ships goods to customers, bills customers, and receives payment from customers. 4. Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities. 5. Time clocks are used for recording time worked by employees. Indicate whether each procedure is an example of...
Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example...
Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Several individuals operate the cash register using the...
Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example...
Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Several individuals operate the cash register using the...
Current Attempt in Progress Listed below are five procedures followed by Eikenberry Company. Indicate whether each...
Current Attempt in Progress Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Several individuals operate the...
Exercise 8-05 Listed below are five procedures followed by Eikenberry Company. 1. Several individuals operate the...
Exercise 8-05 Listed below are five procedures followed by Eikenberry Company. 1. Several individuals operate the cash register using the same register drawer. 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. 3. Joe Cockrell writes checks and also records cash payment entries. 4. One individual orders inventory, while a different individual authorizes payments. 5. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. Indicate whether...
The following control procedures are used at Torres Company for over-the-counter cash receipts. (a) For each...
The following control procedures are used at Torres 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. (b) For each weakness, suggest a change in procedure that will result in good internal control. 1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked briefcase in the stock room until it is deposited in the bank. (a) Weakness: Principle: ...
ACCT2110 Financial Accounting Chapter Seven Internal Control and Cash Homework Problem 1. The following control procedures...
ACCT2110 Financial Accounting Chapter Seven Internal Control and Cash Homework Problem 1. The following control procedures are used at Feliz Company fo 1. All over-the-counter receipts are registered by four clerks who use a cash register with a single cash d r over-the-counter cash receipts 2. To minimize the risk of robbery, cash in excess of $200 is stored in an unlocked drawer in a desk in th . Each clerk counts his/her own receipts at the end of the...
Check m Required: Match the following internal controls with the categories of control activities. Control Activities...
Check m Required: Match the following internal controls with the categories of control activities. Control Activities C Internal Controls Separate handling cash (receipt and deposit) functions from record-keeping functions (recording transactions in the accounts receivable subsidiary ledger). Require purchases, payroll, and cash disbursements to be authorized by a designated person Require accounting department employees to take vacations. d. Separate purchasing functions from payables functions. e. Ensure that the same person isn't authorized to write and sign a check f. When...
Choices are Establish responsibilities Insure assets and bond key employees Separate record keeping from custody of...
Choices are
Establish responsibilities
Insure assets and bond key employees
Separate record keeping from custody of assets
Choices
Apply technological controls
Establish responsibilities
Insure assets and bond key employees
Maintain adequate records
Perform regular and independent reviews
Separate record keeping from custody of asset
Identify the internal control principle that was violated in each of the following separate situations. Situations Principle Violated The recordkeeper left town after the owner discovered a large sum of money had disappeared. An audit found...
Exercise 7-02 The following control procedures are used at Torres Company for over-the-counter cash receipts. For...
Exercise 7-02 The following control procedures are used at Torres Company for over-the-counter cash receipts. For each procedure, explain the weakness in internal control, and identify the control principle that is a violated. (b) For each weakness, suggest a change in procedure that will result in good internal control. 1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked briefcase in the stockroom until it is deposited in the bank. (a) Weakness: Principle:...
Exercise 8-06 Listed below are five procedures followed by Gilmore Company. 1. Employees are required to take vacations. 2. Any member of the sales department can approve credit sales. 3. Paul Jaggard ships goods to customers, bills customers, and receives payment from customers. 4. Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities. 5. Time clocks are used for recording time worked by employees. Indicate whether each procedure is an example of...
Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Several individuals operate the cash register using the...
Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Several individuals operate the cash register using the...
Current Attempt in Progress Listed below are five procedures followed by Eikenberry Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Several individuals operate the...
Exercise 8-05 Listed below are five procedures followed by Eikenberry Company. 1. Several individuals operate the cash register using the same register drawer. 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. 3. Joe Cockrell writes checks and also records cash payment entries. 4. One individual orders inventory, while a different individual authorizes payments. 5. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. Indicate whether...
ACCT2110 Financial Accounting Chapter Seven Internal Control and Cash Homework Problem 1. The following control procedures are used at Feliz Company fo 1. All over-the-counter receipts are registered by four clerks who use a cash register with a single cash d r over-the-counter cash receipts 2. To minimize the risk of robbery, cash in excess of $200 is stored in an unlocked drawer in a desk in th . Each clerk counts his/her own receipts at the end of the...
Check m Required: Match the following internal controls with the categories of control activities. Control Activities C Internal Controls Separate handling cash (receipt and deposit) functions from record-keeping functions (recording transactions in the accounts receivable subsidiary ledger). Require purchases, payroll, and cash disbursements to be authorized by a designated person Require accounting department employees to take vacations. d. Separate purchasing functions from payables functions. e. Ensure that the same person isn't authorized to write and sign a check f. When...
Choices are
Establish responsibilities
Insure assets and bond key employees
Separate record keeping from custody of assets
Choices
Apply technological controls
Establish responsibilities
Insure assets and bond key employees
Maintain adequate records
Perform regular and independent reviews
Separate record keeping from custody of asset
Identify the internal control principle that was violated in each of the following separate situations. Situations Principle Violated The recordkeeper left town after the owner discovered a large sum of money had disappeared. An audit found...
Exercise 7-02 The following control procedures are used at Torres Company for over-the-counter cash receipts. For each procedure, explain the weakness in internal control, and identify the control principle that is a violated. (b) For each weakness, suggest a change in procedure that will result in good internal control. 1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked briefcase in the stockroom until it is deposited in the bank. (a) Weakness: Principle:...
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