Financial Accounting (5th Edition) (What's New in Accounting)
5th Edition
ISBN: 9780134727790
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 6, Problem 5EIA
To determine
Discuss whether JS should distrust her employees; explain whether testing the honesty of employees without their knowledge is unethical; mention whether JS could disclose that she tested the employees; and discuss whether it was ethical behavior on the part of JS to test the assistant manager.
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The following procedures are used by The Taco Shop.a. Customers pay cash for all food orders. Cash is placed in a cash register and a receipt is issuedupon request by the customer.b. At the end of each day, the cashier counts the cash, prepares a cash count sheet, and has themanager count the cash and review and sign the cash count sheet.c. At three times during the day, excess cash is removed from the cash registers and placed in avault until it is taken for night deposit at the local bank.d. Orders for drink cups, straws, condiments, and other supplies are written on prenumbered purchase order forms and are approved by the manager before being sent to an authorized supplier.e. When supplies are received, they are stacked just inside the back door to the kitchen, which isleft unlocked because part-time employees frequently arrive and leave at various times duringthe day.Required:1. Indicate whether each procedure represents a strength or weakness. Explain your reasons.2. For each…
Once a month, the sales department sends sales invoices to the accounting department to be recorded.
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Intruction:
Identify the six principles of internal control and give an example of each principle that you might observe when picking up your pizzas.
The following procedures were recently implemented by SUP Yoga Co.:
Each cashier is assigned a separate cash register drawer to which no other cashier has access.
All sales are rung up on the cash register, and a receipt is given to the customer. All sales are recorded on a record locked inside the cash register.
At the end of a shift, each cashier counts the cash in his or her cash register, unlocks the cash register record, and compares the amount of cash with the amount on the record to determine cash shortages and overages.
Checks received through the mail are given daily to the accounts receivable clerk for recording collections on account and for depositing in the bank.
Vouchers and all supporting documents are stamped PAID after being paid by the treasurer.
Disbursements are made from the petty cash fund only after a petty cash receipt has been completed and signed by the payee.
The bank reconciliation is prepared by the accountant.
Instructions:
Indicate whether each of the…
Chapter 6 Solutions
Financial Accounting (5th Edition) (What's New in Accounting)
Ch. 6 - Prob. 1DQCh. 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. 1SCCh. 6 - Prob. 2SCCh. 6 - Prob. 3SCCh. 6 - Prob. 4SCCh. 6 - Separation of duties refers to separating all of...Ch. 6 - Which of the following is not a control activity?...Ch. 6 - Prob. 7SCCh. 6 - Prob. 8SCCh. 6 - Internal auditors focus on _________ ; external...Ch. 6 - Prob. 10SCCh. 6 - Prob. 11SCCh. 6 - Prob. 12SCCh. 6 - Prob. 1SECh. 6 - Fraud triangle (Learning Objective 3) 5-10 min....Ch. 6 - Prob. 3SECh. 6 - Internal controls (Learning Objective 2) 5-10 min....Ch. 6 - Prob. 5SECh. 6 - Prob. 6SECh. 6 - Prob. 7SECh. 6 - Prob. 8SECh. 6 - Prob. 9SECh. 6 - Prob. 10SECh. 6 - Prob. 11SECh. 6 - Accounting terminology (Learning Objectives 1 4)...Ch. 6 - Prob. 13SECh. 6 - Prob. 14SECh. 6 - Prob. 1CFSAPCh. 6 - Prob. 1EIACh. 6 - Prob. 2EIACh. 6 - Prob. 3EIACh. 6 - Prob. 4EIACh. 6 - Prob. 5EIACh. 6 - Prob. 6EIACh. 6 - Case 7. Kelly Straton, a trusted employee of...Ch. 6 - Prob. 8EIACh. 6 - Prob. 1FACh. 6 - Industry Analysis Purpose: To help you understand...Ch. 6 - Prob. 1SBACh. 6 - Prob. 1WC
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- Listed below are five procedures followed by Eikenberry Company. 1. Several individuals operate the cash register using the same register drawer. 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. 3. Joe Cockrell writes checks and also records cash payment entries. 4. One individual orders inventory, while a different individual authorizes payments. 5. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. 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. Procedure IC Good or Weak? Related Internal Control Principle 1. Weak…arrow_forwardAs the full-time bookkeeper, your job is to make any corrections to the general ledger accounts. Each correction must include the reason for the change and the effect on each account, whether it is an increase or decrease. For the third time this month, a co-worker has recorded a cash receipt twice and wants you to record a correcting entry that will reverse the mistakes. The correcting entry will record a credit to the Cash account and a debit to the Sales account. Your co-worker has offered to buy you dinner for fixing this mistake. Respond to the following in a minimum of 175 words: What should you investigate before making a decision about the correcting entry? What is happening to the Cash account? Would you accept a dinner offer from your co-worker for fixing the mistake?arrow_forwardAssume that you are a cashier and your manager requires that you, as cashier, immediately enter each sale when it occurs. Recently, lunch hour traffic has increased and the assistant manager asks you to avoid delays by taking customers’ cash and making change without entering sales. The assistant manager says she will add up cash and enter sales after lunch. She says that, in this way, the customers will be happy and the register record will always match the cash amount when the manager arrives at three o’clock. The advantage of the process proposed by the assistant manager includes improved customer service, fewer delays, and less work for you. The disadvantage is that the assistant manager could steal cash by simply recording less sales than the cash received and pocketing the excess cash. You decide to reject her suggestion without the manger's approval and to confront her on the ethics of her suggestion. Required: Propose and evaluate two other courses of action you might…arrow_forward
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