Internal Control: Internal controls are policies and procedures implemented by an organization to attain operational goals and maintain the integrity of accounting. Internal Control system has its five integral components those together works an effective internal control. To Indicate: A control procedure to prevent the theft of cash by the employees.

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Question 1 The following internal control procedures are followed in Trisha’s Office Supplies: (a) Cash and Banking Johanne has been working as the cashier for Trisha’s Office Supplies for the last five years and apart from receiving and recording cash received, she also prepares banking and does deposits in the bank. (b)Debtors and Creditors There were several occasions when sales staffs have approved large credit sales and recently business’s bad debts have significantly increased. (c)Fixed Assets The business has three delivery vans and the drivers are allowed to keep the van after work and during the weekends. Recently it is noticed that there is high cost of van repairs and maintenance and fuel consumption while the sales have declined. (d)Inventory There are no perpetual records in Trisha’s Office Supplies, the store clerk does not keep records of goods received or issued. A physical count is done on a monthly basis by the store clerk under supervision. (e)Wages and…

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Chapter 4, Problem 56BPSB

To determine

Concept Introduction:

Internal Control:

Internal controls are policies and procedures implemented by an organization to attain operational goals and maintain the integrity of accounting. Internal Control system has its five integral components those together works an effective internal control.

To Indicate:

A control procedure to prevent the theft of cash by the employees.

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Question 1 The following internal control procedures are followed in Trisha’s Office Supplies: (a) Cash and Banking Johanne has been working as the cashier for Trisha’s Office Supplies for the last five years and apart from receiving and recording cash received, she also prepares banking and does deposits in the bank. (b)Debtors and Creditors There were several occasions when sales staffs have approved large credit sales and recently business’s bad debts have significantly increased. (c)Fixed Assets The business has three delivery vans and the drivers are allowed to keep the van after work and during the weekends. Recently it is noticed that there is high cost of van repairs and maintenance and fuel consumption while the sales have declined. (d)Inventory There are no perpetual records in Trisha’s Office Supplies, the store clerk does not keep records of goods received or issued. A physical count is done on a monthly basis by the store clerk under supervision. (e)Wages and…

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