Exercises Identify the principles of internal control. E7.1 (LO 1), C Ricci's Pizza operates strictly on a carryout basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the counter, the customer can se- Other employees making the pizzas and the large ovens in which the pizzas are baked. Instructions dentify the six principles of internal control and give an example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all the principles.) dentify internal control weaknesses over cash receipts and suggest improvements. rm 11

Exercises Identify the principles of internal control. E7.1 (LO 1), C Ricci's Pizza operates strictly on a carryout basis. Customers pick up their orders at a counter where a clerk exchanges the pizza for cash. While at the counter, the customer can se- Other employees making the pizzas and the large ovens in which the pizzas are baked. Instructions dentify the six principles of internal control and give an example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all the principles.) dentify internal control weaknesses over cash receipts and suggest improvements. rm 11

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter5: Internal Control And Cash

Section: Chapter Questions

Problem 5.3C

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5 Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices. Once a month, the sales department sends sales invoices to the accounting department to be recorded. Several clerks at Harper's Groceries use the same cash register drawer. Steve orders merchandise for Baker Company; he also receives merchandise and authorizes payment for merchandise.
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 Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityHuman Resource ControlsDocumentation ProceduresPhysical Controls 2. A monthly bank reconciliation is prepared by someone who has no other cash…
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 Select a control principle that is violated 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. Select a weakness in internal control Select a control principle that is violated 3. Joe Cockrell writes checks and also records cash payment entries. Select a weakness in internal control Select a control principle that is violated…
Following are five separate cases involving internal control issues. a. Chi Han receives all incoming customer cash receipts for her employer and posts the customer payments to their respective accounts. b. At Tico Company, Julia and Trevor alternate lunch hours. Julia is the petty cash custodian, but if someone needs petty cash when she is at lunch, Trevor fills in as custodian. c. Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up the computerized accounting system but does not password lock her computer. d. Ben Shales prides himself on hiring quality workers who require little supervision. As office manager, Ben gives his employees full discretion over their tasks and for years has seen no reason to perform independent reviews of their work. e. Carla Farah’s manager has told her to reduce costs. Carla decides to raise the deductible on the plant’s property insurance from $5,000 to $10,000. This cuts the property insurance…
Rafi works at TBG Cinema. Sells the tickets and also ushers customers into the cinema halls. The standard procedure requires Rafi to tear the tickets, give one-half to the customer, and keep the other half for record. In order to control cash receipts, the manager will compare each night's cash receipts with the number of ticket subs on hand. Identify the internal control weakness in this situation. How can this situation be improved?
Please read the following and identify any internal control principles that may be violated in the Jane Hardware store.(identify what could go wrong and what controls Jane Hardware should put in place to prevent it) Jerry Finch has worked for Jane Hardware for many years, Jerry has been a model employee. He has not taken a vacation in over three years, always stating that work was too important. One of Jerry's primary jobs at the store is to open mail and list the checks received. He also collects cash from customers at the store's outdoor nursery area. There are times that things are so hectic that Jerry does not bother to use the register, simply making change from cash he carries with him. When things slow down at the store Jerry often offers to help Cindy(the Accounting Clerk) post payments to the customer's accounts receivable ledger. Cindy is always happy to receive help since she is also quite busy and because Jerry is such a careful worker.
Following are five separate cases involving internal control issues. a. Tywin Company keeps very poor records of its equipment. Instead, the company asserts its employees are honest and would never steal from the company. b. Marker Theater has a computerized order-taking system for its tickets. The system is backed up once a year. c. Sutton Company has two employees handling acquisitions of inventory. One employee places purchase orders and pays vendors. The second employee receives the merchandise. d. The owner of Super Pharmacy uses a check software/printer to prepare checks, making it difficult for anyone to alter the amount of a check. The check software/printer, which is not password protected, is on the owner’s desk in an office that contains company checks and is normally unlocked. e. To ensure the company retreat would not be cut, the manager of Lavina Company decided to save money by canceling the external audit of internal controls. Required 1. For each case, identify the…
Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control principle violated or followed for each procedure. 1. The same employee requests, records, and makes payment for purchases of inventory. 2. The company saves money by having employees involved in operations perform the only review of internal controls. 3. Time is saved by not updating records for use of supplies. 4. The recordkeeper is not allowed to write checks or initiate EFTs. 5. Each salesclerk is in charge of her own cash drawer.
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…
Understanding Sarbanes-Oxley and identifying internal control strengths and weaknesses The following situations suggest a strength or a weakness in internal control. a. Top managers delegate all internal control procedures to the accounting department. b. Accounting department staff (or the bookkeeper) orders merchandise and approves invoices for payment. c. Cash received over the counter is controlled by the sales clerk, who rings up the sale and places the cash in the register. The sales clerk matches the total recorded by the register to each day’s cash sales. d. The employee who signs checks need not examine the payment packet because he is confident the amounts are correct. Requirements 1. Define internal control 2. The system of internal control must be tested by external auditors. What law or rule requires this testing? 3. Identify each item in the list above as either a strength or a weakness in internal control, and give your reason for each answer.
Understanding Sarbanes-Oxley and identifying internal control strengths and weaknesses The following situations suggest a strength or a weakness in internal control. Top managers delegate all internal control procedures to the accounting department. Accounting department staff (or the bookkeeper) orders merchandise and approves invoices for payment. Cash received over the counter is controlled by the sales clerk, who rings up the sale and places the cash in the register. The sales clerk matches the total recorded by the register to each day’s cash sales. The employee who signs checks need not examine the payment packet because he is confident the amounts are correct. Requirements Define internal control The system of internal control must be tested by external auditors. What law or rule requires this testing? . Identify each item in the list above as either a strength or a weakness in internal control, and give your reason for each answer.
Internal Controls Jimmy Pace has recently been hired as the manager of Jittery Jon’s Coffee Shop. Jittery Jon’s Coffee Shop is a national chain of franchised coffee shops. During his first month as store manager, Jimmy encountered the following internal control situations: a. Jittery Jon’s Coffee Shop has one cash register. Prior to Jimmy’s joining the coffee shop, each employee working on a shift would take a customer order, accept payment, and then prepare the order. Jimmy made one employee on each shift responsible for taking orders and accepting the customer’s payment. Other employees prepare the orders. I with Jimmy's method of handling this situation because Jimmy has the internal control principle of assignment of responsibility and the internal control principle of segregation of duties. b. Because only one employee uses the cash register, that employee is responsible for counting the cash at the end of the shift and verifying that the cash in the drawer matches the…