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Exercise 4-41 Classifying Internal Control Procedures Required: Match each 01 the control procedures listed below with the most closely related control procedures type. Your answer should pair each of the numbers 1 through 10 with the appropriate letter. Control Procedure Type: a. Adequate documents and records b. Checks on recorded amounts c. Clearly defined authority and responsibility d. Safeguards over assets and records e. Segregation of duties Control Procedures Only the cashier assigned to the cash register is allowed to perform transactions. Division managers are evaluated annually on the basis of their division’s profitability. Invoices received from outside suppliers are filed with purchase orders. Employees with access to the accounting records are not permitted to open the mail because it contains many payments by check from customers. The extent of access to the many segments of the company’s computer system is tightly controlled by individual identification cards and passwords that change at regular intervals. Each shipment to customers from inventory is recorded on a specially printed form bearing a sequential number; these forms are the basis for entries intel the computer system, which makes entries to inventory records and produces periodic reports of sales and shipments. At regular intervals, internal audit reviews a sample of expenditure transactions to determine that payment has been made to a bona fide supplier and that the related goods or services were received and appropriately used. A construction company stores large steel girders in an open yard surrounded by a 5-foot fence and stores welding supplies in a controlled-access, tightly secured concrete building. Cash registers display the price of each item purchased to the customer as it is recorded and produce a customer receipt that describes each item and gives its price. The person in the controller’s office who prepares and mails checks to suppliers cannot make entries in the general ledger system.

BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881
BuyFind

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
Publisher: Cengage Learning
ISBN: 9781337690881

Solutions

Chapter
Section
Chapter 4, Problem 41E
Textbook Problem

Exercise 4-41 Classifying Internal Control Procedures

Required:

Match each 01 the control procedures listed below with the most closely related control procedures type. Your answer should pair each of the numbers 1 through 10 with the appropriate letter.

Control Procedure Type:

a. Adequate documents and records

b. Checks on recorded amounts

c. Clearly defined authority and responsibility

d. Safeguards over assets and records

e. Segregation of duties

Control Procedures

  1. Only the cashier assigned to the cash register is allowed to perform transactions.
  2. Division managers are evaluated annually on the basis of their division’s profitability.
  3. Invoices received from outside suppliers are filed with purchase orders.
  4. Employees with access to the accounting records are not permitted to open the mail because it contains many payments by check from customers.
  5. The extent of access to the many segments of the company’s computer system is tightly controlled by individual identification cards and passwords that change at regular intervals.
  6. Each shipment to customers from inventory is recorded on a specially printed form bearing a sequential number; these forms are the basis for entries intel the computer system, which makes entries to inventory records and produces periodic reports of sales and shipments.
  7. At regular intervals, internal audit reviews a sample of expenditure transactions to determine that payment has been made to a bona fide supplier and that the related goods or services were received and appropriately used.
  8. A construction company stores large steel girders in an open yard surrounded by a 5-foot fence and stores welding supplies in a controlled-access, tightly secured concrete building.
  9. Cash registers display the price of each item purchased to the customer as it is recorded and produce a customer receipt that describes each item and gives its price.
  10. The person in the controller’s office who prepares and mails checks to suppliers cannot make entries in the general ledger system.

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Chapter 4 Solutions

Cornerstones of Financial Accounting
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Ch. 4 - Why does a company give particular attention to...Ch. 4 - Why is it important to segregate the duties for...Ch. 4 - Describe two advantages of performing...Ch. 4 - Describe the potential sources of difference...Ch. 4 - What kinds of bank reconciliation items require...Ch. 4 - Describe how cash over and short can be used for...Ch. 4 - Why do most companies have petty cash funds?Ch. 4 - What are cash equivalents?Ch. 4 - Why do companies invest their cash in short-term...Ch. 4 - What is the operating cycle?Ch. 4 - Describe the basic cash management principles.Ch. 4 - Why do companies hold short-term investments?Ch. 4 - What is the primary role of internal controls in...Ch. 4 - Which of the following is not one of the three...Ch. 4 - Which of the following is not one of the five...Ch. 4 - Which of the following is not one of the five...Ch. 4 - The internal audit function is part of what...Ch. 4 - Which of the following is not generally an...Ch. 4 - Allowing only certain employees to order goods and...Ch. 4 - Deposits made by a company but not yet reflected...Ch. 4 - Which one of the following would not appear on a...Ch. 4 - Which one of the following is not a cash...Ch. 4 - The operating cycle is best described as the time...Ch. 4 - High level cash management strategies include bank...Ch. 4 - Effective cash management and control includes all...Ch. 4 - Cash management principles do not include earning...Ch. 4 - Which one of the following statements is true?...Ch. 4 - Cornerstone Exercise 4-16 Bank Reconciliation...Ch. 4 - Cornerstone Exercise 4-17 Bank Reconciliation The...Ch. 4 - Cornerstone Exercise 4-18 Adjusting Entry from...Ch. 4 - Cornerstone Exercise 4-19 Adjusting Entry from...Ch. 4 - Cornerstone Exercise 4-20 Bank Reconciliation Tiny...Ch. 4 - Cornerstone Exercise 4-21 Cash Over and Short On a...Ch. 4 - Cornerstone Exercise 4-22 Cash Over and Short...Ch. 4 - Cornerstone Exercise 4-23 Petty Cash Fund Murphy...Ch. 4 - Cornerstone Exercise 4-24 Petty Cash with Change...Ch. 4 - Brief Exercise 4-25 Role of Internal Control...Ch. 4 - Brief Exercise 4-26 Components of Internal Control...Ch. 4 - Brief Exercise 4-27 Bank Reconciliation Hula Corp....Ch. 4 - Brief Exercise 4-28 Adjusting Entry from Bank...Ch. 4 - Brief Exercise 4-29 Adjusting Entry from Bank...Ch. 4 - Brief Exercise 4-30 Bank Reconciliation Garrison...Ch. 4 - Brief Exercise 4-31 Bank Reconciliation Zing Corp....Ch. 4 - Brief Exercise 4-32 Cash Over and Short At the end...Ch. 4 - Brief Exercise 4-33 Cash Over and Short Milner...Ch. 4 - Brief Exercise 4-34 Petty Cash Fund Kingery Inc....Ch. 4 - Brief Exercise 4-35 Petty Cash With Change in Fund...Ch. 4 - Brief Exercise 4-36 Cash Reporting Richter...Ch. 4 - Brief Exercise 4-37 Operating Cycle Businesses...Ch. 4 - Brief Exercise 4-38 Cash Management Effective cash...Ch. 4 - Exercise 4-39 Internal Control System Required: A...Ch. 4 - Exercise 4-40 Internal Control Terminology...Ch. 4 - Exercise 4-41 Classifying Internal Control...Ch. 4 - Hannah Thacher, a longtime employee of a local...Ch. 4 - Miller Enterprises deposits the cash received...Ch. 4 - Exercise 4-44 Bank Reconciliation OBJECTIVE a...Ch. 4 - Exercise 4-45 Bank Reconciliation (Partial)...Ch. 4 - OBJECTIVE 9 Exercise 4-46 Bank Reconciliation...Ch. 4 - OBJECTIVE 0 Exercise 4-47 Bank Reconciliation @...Ch. 4 - Hawk Enterprises identified the following items on...Ch. 4 - Exercise 4-49 Recording Petty Cash Account...Ch. 4 - Exercise 4-50 Cash Reporting OBJECTIVE a Brown...Ch. 4 - Exercise 4-51 Components of Cash The office...Ch. 4 - OBJECTIVE 9 Exercise 4-52 Operating Cycle Business...Ch. 4 - OBJ ECTWE 6 Exercise 4-53 Operating Cycle A list...Ch. 4 - Exercise 4-54 Operating Cycle and Current...Ch. 4 - Problem 4-55A Role of Internal Control Internal...Ch. 4 - Problem 4-56A Internal Control Procedures for Cash...Ch. 4 - Problem 4-5?A Internal Control for Cash After...Ch. 4 - OBJECTIVE Problem 4-53.11 Bank Reconfirmation E...Ch. 4 - OBJECTIVEG Problem 4-5944 Bank Reconciliation...Ch. 4 - Problem #6016; Bank Reconciliation OBJECTIVE The...Ch. 4 - OBJECTIVE Problem 4-6111 Recording Petty Cash...Ch. 4 - Problem 4-553 Role of Internal Control Internal...Ch. 4 - Problem 4-563 Internal Control Procedures for Cash...Ch. 4 - Problem 4-515 internal Control for Cash After...Ch. 4 - Problem 4-585 Bank Reconciliation OBJECTIVE o...Ch. 4 - OBJECTNE The items on the bank statement are...Ch. 4 - Problem 4-603 Bank Reconciliation OBJECTIVE o The...Ch. 4 - Problem 4-61 B Recording Petty Cash Transactions...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-62 Ethics and Cash Controls You have just...Ch. 4 - Case 4-63 The Operating Cycle There are two retail...Ch. 4 - Case 4-63 The Operating Cycle There are two retail...Ch. 4 - Case 4-64 Internal Controls for Cash Disbursements...Ch. 4 - Case 4-64 Internal Controls for Cash Disbursements...Ch. 4 - Case 4-65 Internal Controls for Collection of...Ch. 4 - Case 4-66 Cash Management Hollis Corporation has...Ch. 4 - Case 4-66 Cash Management Hollis Corporation has...Ch. 4 - Case 4-67 Cash and Internal Controls Identify a...Ch. 4 - Case 4-67 Cash and Internal Controls Identify a...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-68 Researching and Analysis Using the...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-69 Comparative Analysis: Under Armour,...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...

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