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E7-3 The following control procedures are used in Keaton Company for over-the-counter cash receipts. 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. 2. All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer. 3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief- case in the stock room until it is deposited in the bank. 4. At the end of each day, the total receipts are counted by the cashier on duty and rec- onciled to the cash register total. 5. The company accountant makes the bank deposit and then records the day's receipts. i o br 00 hal Control, and Cash Instructions (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 the procedure that will result in good internal control.

E7-3 The following control procedures are used in Keaton Company for over-the-counter cash receipts. 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. 2. All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer. 3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief- case in the stock room until it is deposited in the bank. 4. At the end of each day, the total receipts are counted by the cashier on duty and rec- onciled to the cash register total. 5. The company accountant makes the bank deposit and then records the day's receipts. i o br 00 hal Control, and Cash Instructions (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 the procedure that will result in good internal control.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter8: Fraud, Internal Controls, And Cash
Section: Chapter Questions
Problem 5MC: There are several elements to internal controls. Which of the following would not address the issue...
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E7-3 The following control procedures are used in Keaton Company for over-the-counter cash receipts. 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. 2. All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer. 3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief- case in the stock room until it is deposited in the bank. 4. At the end of each day, the total receipts are counted by the cashier on duty and rec- onciled to the cash register total. 5. The company accountant makes the bank deposit and then records the day's receipts. i o br 00
Transcribed Image Text:E7-3 The following control procedures are used in Keaton Company for over-the-counter cash receipts. 1. Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy. 2. All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer. 3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief- case in the stock room until it is deposited in the bank. 4. At the end of each day, the total receipts are counted by the cashier on duty and rec- onciled to the cash register total. 5. The company accountant makes the bank deposit and then records the day's receipts. i o br 00
hal Control, and Cash Instructions (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 the procedure that will result in good internal control.
Transcribed Image Text:hal Control, and Cash Instructions (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 the procedure that will result in good internal control.
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