FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
expand_more
expand_more
format_list_bulleted
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Following are five separate cases involving internal control issues.
Required:
1. For each case, identify the principle(s) of internal control that is violated.
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…
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…
Applying internal control over cash receipts
Sandra Kristof sells furniture for McKinney Furniture Company. Kristof is having financial problems and takes $650 that she received from a customer. She rang up the sale through the cash register. What will alert Megan McKinney, the controller, that something is wrong?
Chapter 6 Solutions
FINANCIAL ACCT-CONNECT
Ch. 6 - List the seven braod principles of internal...Ch. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 1QSCh. 6 - Prob. 2QSCh. 6 - Prob. 3QSCh. 6 - Prob. 4QSCh. 6 - Prob. 5QSCh. 6 - Prob. 6QSCh. 6 - Prob. 7QSCh. 6 - Prob. 8QSCh. 6 - Prob. 9QSCh. 6 - Prob. 10QSCh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 1PSACh. 6 - Prob. 2PSACh. 6 - Prob. 3PSACh. 6 - Prob. 4PSACh. 6 - Prob. 1PSBCh. 6 - Prob. 2PSBCh. 6 - Prob. 3PSBCh. 6 - Prob. 4PSBCh. 6 - Prob. 6SPCh. 6 - Prob. 2BTNCh. 6 - Prob. 3BTNCh. 6 - Prob. 4BTNCh. 6 - Prob. 7BTNCh. 6 - Prob. 8BTNCh. 6 - Prob. 9BTN
Knowledge Booster
Similar questions
- There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records? A. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments.arrow_forwardDetermine whether each cash receipts procedure is an internal control strength or weakness. 1. If a salesclerk makes an error in recording a cash sale, she can access the register’s electronic record to correct the transaction. 2. All sales transactions, even those for less than $1, are recorded on a cash register. 3. Two employees are tasked with opening mail that contains cash receipts. 4. One of the two employees tasked with opening mail is also the recordkeeper for the business. 5. The supervisor has access to both cash and the accounting records. 6. Receipts are given to customers only for sales that are above $20.arrow_forwardDetermine whether each cash receipts procedure is an internal control strength or weakness. Cash receipts 1. If a sales clerk makes an error in recording a cash sale, they can access the register's electronic record to correct the transaction. 2. One of the two employees tasked with opening mail is also the recordkeeper for the business. 3. The supervisor has access to both cash and the accounting records. 4. Receipts are given to customers for only sales that are above $20. 5. Sales clerks are not required to enter the sale in the register after each transaction. Instead, the company gives employees flexibility to enter sales at the end of the day or week. 6. The recordkeeper of cash transactions is also in charge of depositing cash receipts in the bank. Strength or Weaknessarrow_forward
- 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…arrow_forwardListed 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…arrow_forwardThe following control procedures are used in Kelton Company for over-the-counter cash receipts. (a) For each procedure, explain the weakness in internal control and identify the control principle that is violated. Principle Violated 1. 2. 3. 4. 5. Procedure Each store manager is responsible for interviewing applicants for achier jobs. They are hired if they seem honest and trust worthy. 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 $100 is stored in an unlocked attaché case in the stock room until it is deposited in the bank. At the end of each day the total receip 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. Weaknessarrow_forward
- Following are five separate cases involving internal control issues. Required: 1. For each case, identify the principle(s) of internal control that is violated. a. Chi Han receives all incoming customer cash receipts for her employer and posts the customer payments to their respective accounts. b. Sutton Company has two employees handling acquisitions of inventory. One employee places purchase orders and pays vendors. The second employee receives the merchandise. c. 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. d. 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. e. Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up…arrow_forwardStartup is a very small business. Ethel, the accountant, does all the accounting, answers the phone and does the daily bank deposit in addition to working the sales desk. A cost effective way for Startup's owner to strengthen internal controls is to Multiple Choice separate the recording and custody function by asking Ethel to list cash receipts as she opens the mall, before preparing the bank deposit hire another accountant to check Ethel's work None of the other alternatives are correct open and review the mail him/herself O segregate duties by insisting that Ethel not update accounts receivable records on the days she makes bank depositsarrow_forwardJanice Dodds opens the mail for Ajax Plumbing Company. She lists all customer checks on a spreadsheet that includes the name of the customer and the check amount. The checks, along with the spreadsheet, are then sent to Jim Seymour in the accounting department, who records the checks and deposits them daily in the company’s checking account. Required: Describe how the company could improve its internal control procedure for the handling of its cash receipts.arrow_forward
- Dogtopia sells pet supplies and food and handles all sales with a cash register. The cash register displays the amount of the sale. It also shows the cash received and any change returned to the customer. The register also produces a customer receipt but keeps no internal record of the transactions. At the end of the day, the clerk counts the cash in the register and gives it to the cashier for deposit in the company bank account. Requirements 1. Identify the internal control weakness over cash receipts. 2. What could you do to correct the weakness?arrow_forwardHarriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients’ accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient’s check in Dr. Conrad’s name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer’s account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money. Required 1. Who is the best person in Dr.…arrow_forwardHarriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients' accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient's check-in Dr. Conrad's name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money. 1. Who is the best person in Dr. Conrad's…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Pkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengagePrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College