The following control procedures are used in Danner Company for over-the-counter cash receipts.Cashier are experienced; thus, they are not bonded.All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer.To minimize the risk of robbery, cash in excess of P100 is stored in an unlocked attache’ case in the stock room until it is deposited in the bank.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.Each week, Katja leave 100 company checks in a unmarked envelope on a shelf behind the cash register.The store manager personally approves all payments before signing and issuing checks.The company checks are unnumbered.After paying the company’s bills, the disbursing clerk files bills in order.The company accountant prepares a bank reconciliation and reports any discrepancies to the owner. Requirements:For each procedure, explain the weakness in internal control and identity the control principle that is involved;

Answer - Internal controls ensures that all the objectives of the organizations are being achieved…

Answered: The following control procedures are…

Pkg Acc Infor Systems MS VISIO CD

10th Edition

ISBN:9781133935940

Author:Ulric J. Gelinas

Publisher:Ulric J. Gelinas

Chapter11: The Billing/accounts Receivable/cash receipts (b/ar/cr) Process

Section: Chapter Questions

Problem 2SP

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The following control procedures are used in Danner Company for over-the-counter cash receipts.

Cashier are experienced; thus, they are not bonded.
All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer.
To minimize the risk of robbery, cash in excess of P100 is stored in an unlocked attache’ case in the stock room until it is deposited in the bank.
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.
Each week, Katja leave 100 company checks in a unmarked envelope on a shelf behind the cash register.
The store manager personally approves all payments before signing and issuing checks.
The company checks are unnumbered.
After paying the company’s bills, the disbursing clerk files bills in order.
The company accountant prepares a bank reconciliation and reports any discrepancies to the owner.

Requirements:

For each procedure, explain the weakness in internal control and identity the control principle that is involved;

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