(b) For each weakness, suggest control. EZ-4 The following control procedures are used in Bunny's Boutique Shoppe for co disbursements. knesses nd 1. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. 2. The store manager personally approves all payments before she signs and issues checks. 3. The store purchases used goods for resale from people that bring items to the store Since that can occur anytime that the store is open, all employees are authorized to purchase goods for resale by disbursing cash from the register. The purchase is docu mented by having the store employee write on a piece of paper a description of the item that was purchased and the amount that was paid. The employee then signs the paper and puts it in the register. 4. After payment, bills are "filed" in a paid invoice folder. 5. The company accountant prepares the bank reconciliation and reports any discrepan- cies to the owner. Instructions (a) For each procedure, explain the weakness in internal control and identify the internal control principle that is violated. (b) For each weakness, suggest a change in the procedure that will result in good internal control.

(b) For each weakness, suggest control. EZ-4 The following control procedures are used in Bunny's Boutique Shoppe for co disbursements. knesses nd 1. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register. 2. The store manager personally approves all payments before she signs and issues checks. 3. The store purchases used goods for resale from people that bring items to the store Since that can occur anytime that the store is open, all employees are authorized to purchase goods for resale by disbursing cash from the register. The purchase is docu mented by having the store employee write on a piece of paper a description of the item that was purchased and the amount that was paid. The employee then signs the paper and puts it in the register. 4. After payment, bills are "filed" in a paid invoice folder. 5. The company accountant prepares the bank reconciliation and reports any discrepan- cies to the owner. Instructions (a) For each procedure, explain the weakness in internal control and identify the internal control principle that is violated. (b) For each weakness, suggest a change in the procedure that will result in good internal control.

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter3: Ethics, Fraud, And Internal Control

Section: Chapter Questions

Problem 10P

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The following control procedures are used in Mendy Lang’s Boutique Shoppe for cash disbursements. 1.The company accountant prepares the bank reconciliation and reports any discrepancies to the owner.2.The store manager personally approves all payments before signing and issuing checks.3. Each week, 100 company checks are left in an unmarked envelope on a shelf behind the cash register.4. After payment, bills are filed in a paid invoice folder.5. The company checks are unnumbered.Instructions (a) For each procedure, explain the weakness in internal control, and identify the internal control principle that is violated.(b) For each weakness, suggest a change in the procedure that will result in good internal control.
Someone answered the question below but its incomplete . I was checking my answers I am unsure about the solution , For example #1 recommended change would be enhance the personnel policies?Please advise. 7 The following control procedures are used in Parker Company for over-the-counter cash receipts. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total. The company accountant makes the bank deposit and then records the day's receipts. 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. check_circle Expert Answer thumb_up thumb_down Step 1 Internal Control: It refers to…
Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. February 2 Wrote a $360 check to establish a petty cash fund. February 5 Purchased paper for the copier for $14.75 that is immediately used. February 9 Paid $36.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. February 12 Paid $7.35 postage to deliver a contract to a client February 14 Reimbursed Adina Sharon, the manager, $70 for mileage on her car February 28 Purchased office paper for $67.77 that is immediately used. February 23 Paid a courier $18 to deliver merchandise sold to a customer, terms FOB destination. February 25 Paid $11.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. February 27 Paid $56 for postage…
Nakashima Gallery had the following petty cash transactions in February of the current year.     Feb. 2 Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $16.55 that is immediately used. 9 Paid $44.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $8.75 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $74 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $51 for postage expenses. 28 The fund had $22.81 remaining in…
Nakashima Gallery had the following petty cash transactions in February of the current year.     Feb. 2 Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $16.55 that is immediately used. 9 Paid $44.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $8.75 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $74 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $51 for postage expenses. 28 The fund had $22.81 remaining in…
Nakashima Gallery had the following petty cash transactions in February of the current year.     Feb. 2 Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $16.55 that is immediately used. 9 Paid $44.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $8.75 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $74 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $51 for postage expenses. 28 The fund had $22.81 remaining in…
Nakashima Gallery had the following petty cash transactions in February of the current year. Feb. 2 Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $16.55 that is immediately used. 9 Paid $44.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $8.75 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $74 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $51 for postage expenses. 28 The fund had $22.81 remaining in…
Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. Feb. 2 Wrote a $360 check to establish a petty cash fund. 5 Purchased paper for the copier for $16.15 that is immediately used. 9 Paid $44.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $7.35 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $70 for mileage on her car. 20 Purchased office paper for $68.77 that is immediately used. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.60 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $57 for postage…
Dogtopia sells pet supplies and food and handles all sales with a cash register. The cash register displays the amount of the sale. It also shows the cash received and any change returned to the customer. The register also produces a customer receipt but keeps no internal record of the transactions. At the end of the day, the clerk counts the cash in the register and gives it to the cashier for deposit in the company bank account. Requirements 1. Identify the internal control weakness over cash receipts. 2. What could you do to correct the weakness?
Applying internal control over cash receipts Sandra Kristof sells furniture for McKinney Furniture Company. Kristof is having financial problems and takes $650 that she received from a customer. She rang up the sale through the cash register. What will alert Megan McKinney, the controller, that something is wrong?
Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. Feb. 2 Wrote a $340 check to establish a petty cash fund. 5 Purchased paper for the copier for $16.35 that is immediately used. 9 Paid $36.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $8.65 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $70 for mileage on her car. 20 Purchased office paper for $67.77 that is immediately used. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $12.00 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $53 for postage…
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