Exercise 7-03 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 same register drawer. Select a weakness in internal control WeakGood Select a control principle that is violated Documentation ProceduresHuman Resource ControlsEstablishment of ResponsibilityIndependent Internal VerificationPhysical ControlsSegregation of Duties 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. Select a weakness in internal control GoodWeak Select a control principle that is violated Physical ControlsSegregation of DutiesEstablishment of ResponsibilityIndependent Internal VerificationDocumentation ProceduresHuman Resource Controls 3. Joe Cockrell writes checks and also records cash payment entries. Select a weakness in internal control GoodWeak Select a control principle that is violated Segregation of DutiesIndependent Internal VerificationEstablishment of ResponsibilityDocumentation ProceduresHuman Resource ControlsPhysical Controls 4. One individual orders inventory, while a different individual authorizes payments. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesHuman Resource ControlsDocumentation ProceduresEstablishment of ResponsibilityIndependent Internal VerificationPhysical Controls 5. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. Select a weakness in internal control WeakGood Select a control principle that is violated

Exercise 7-03 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 same register drawer. Select a weakness in internal control WeakGood Select a control principle that is violated Documentation ProceduresHuman Resource ControlsEstablishment of ResponsibilityIndependent Internal VerificationPhysical ControlsSegregation of Duties 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. Select a weakness in internal control GoodWeak Select a control principle that is violated Physical ControlsSegregation of DutiesEstablishment of ResponsibilityIndependent Internal VerificationDocumentation ProceduresHuman Resource Controls 3. Joe Cockrell writes checks and also records cash payment entries. Select a weakness in internal control GoodWeak Select a control principle that is violated Segregation of DutiesIndependent Internal VerificationEstablishment of ResponsibilityDocumentation ProceduresHuman Resource ControlsPhysical Controls 4. One individual orders inventory, while a different individual authorizes payments. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesHuman Resource ControlsDocumentation ProceduresEstablishment of ResponsibilityIndependent Internal VerificationPhysical Controls 5. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. Select a weakness in internal control WeakGood Select a control principle that is violated

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter7A: Internal Controls

Section: Chapter Questions

Problem 2SEB

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Exercise 7-03

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 same register drawer.	Select a weakness in internal control WeakGood	Select a control principle that is violated Documentation ProceduresHuman Resource ControlsEstablishment of ResponsibilityIndependent Internal VerificationPhysical ControlsSegregation of Duties
2.	A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Physical ControlsSegregation of DutiesEstablishment of ResponsibilityIndependent Internal VerificationDocumentation ProceduresHuman Resource Controls
3.	Joe Cockrell writes checks and also records cash payment entries.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Segregation of DutiesIndependent Internal VerificationEstablishment of ResponsibilityDocumentation ProceduresHuman Resource ControlsPhysical Controls
4.	One individual orders inventory, while a different individual authorizes payments.	Select a weakness in internal control WeakGood	Select a control principle that is violated Segregation of DutiesHuman Resource ControlsDocumentation ProceduresEstablishment of ResponsibilityIndependent Internal VerificationPhysical Controls
5.	Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording.	Select a weakness in internal control WeakGood	Select a control principle that is violated

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