FINANCIAL ACCOUNTING UDEL W/ACCESS >IB
8th Edition
ISBN: 9781119268444
Author: Kimmel
Publisher: WILEY C
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Chapter 7, Problem 19Q
To determine
Internal control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.
To identify: The internal controls principles present in the given situation
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Good internal controls include upon receiving checks from customers by mail, a responsible employee should
A. Add the checks to the daily cash summary
B. Verify that check is supported by prenumbered sales invoices
C. Prepare a duplicate listing of checks received
D. Record the checks in the cash receipts journal
Which of the following internal controls is a common detective control over cash and cash transactions?
a. monthly or periodic bank account reconciliation
b. separation of duties between the approval of invoices and the disbursements duties
c. authorization for a payroll rate change
d. mailing of account statements to customers
In testing controls over cash disbursements, an auditor most likely would determine that the person who signs checks also a. Returns the checks to accounts payable.b. Records the payment in the cash disbursements journalc. Stamped "paid" the supporting documents.d. Updates the accounts payable subsidiary ledger.
Chapter 7 Solutions
FINANCIAL ACCOUNTING UDEL W/ACCESS >IB
Ch. 7 - A local hank reported that it lost 150,000 as the...Ch. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - Prob. 4QCh. 7 - Prob. 5QCh. 7 - Prob. 6QCh. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Prob. 12QCh. 7 - Prob. 13QCh. 7 - Prob. 14QCh. 7 - Prob. 15QCh. 7 - Prob. 16QCh. 7 - Prob. 17QCh. 7 - Prob. 18QCh. 7 - Prob. 19QCh. 7 - Prob. 20QCh. 7 - Prob. 21QCh. 7 - Prob. 22QCh. 7 - Prob. 23QCh. 7 - Prob. 24QCh. 7 - Prob. 25QCh. 7 - Prob. 26QCh. 7 - Prob. 27QCh. 7 - Prob. 28QCh. 7 - Match each situation with the fraud triangle...Ch. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - While examining cash receipts information, the...Ch. 7 - Prob. 7.6BECh. 7 - Luke Rove is uncertain about the control features...Ch. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Prob. 7.14BECh. 7 - Prob. 7.1DIECh. 7 - Prob. 7.2DIECh. 7 - Prob. 7.3DIECh. 7 - Prob. 7.4ADIECh. 7 - Prob. 7.4BDIECh. 7 - Prob. 7.1ECh. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Prob. 7.8ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.1APCh. 7 - Prob. 7.2APCh. 7 - Prob. 7.3APCh. 7 - Prob. 7.4APCh. 7 - Prob. 7.5APCh. 7 - Prob. 7.6APCh. 7 - Prob. 7.7APCh. 7 - Prob. 7.8APCh. 7 - Prob. 7CCCPCh. 7 - Prob. 7.1EYCTCh. 7 - Prob. 7.2EYCTCh. 7 - Prob. 7.3EYCTCh. 7 - Prob. 7.4EYCTCh. 7 - Prob. 7.5EYCTCh. 7 - Prob. 7.6EYCTCh. 7 - Prob. 7.7EYCTCh. 7 - Prob. 7.8EYCTCh. 7 - Prob. 7.9EYCTCh. 7 - Prob. 7.10EYCTCh. 7 - Prob. 7.1IFRSCh. 7 - Prob. 7.2IFRS
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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_forwardWhich of the following is not an example of control procedures to safeguard cash received from accounts receivables? A.All receipts of cash should be recorded in the cash acount B.Employees keep records of all the receipts,with details of the amount received C.One employee is in charge of receiving cash and another employee in charge of preparing accouting records D.One employee should be responsible for collecting and banking cash receipts on a daily basisarrow_forwardWhich of the following controls will help prevent skimming? a. The accounts receivable bookkeeper’s duties are separated from preparing the bank deposit b. The accounts receivable bookkeeper has access to collections from customers. c. The accounts receivable bookkeeper is responsible for preparing the bank deposit. d. The accounts receivable bookkeeper makes all entries in the cash receipts book.arrow_forward
- Which of the following are important elements of a cash disbursement control system? Note: Select all that apply. Check All That Apply All expenditures are authorized before a check is prepared. Checks are signed only by authorized Individuals. The bank-generated deposit slip should be compared with the check listing. The person opening the mall is not the person who maintains the accounting records. Unauthorized payments are prevented.arrow_forwardWhich of the following procedures would an auditor most likely perform to test controls relating to management's assertion about the completeness of cash receipts for cash sales at a retail outlet? O Inquire about employees' access to recorded but undeposited cash. O Compare the cash balance in the general ledger with the bank confirmation request. O Observe the consistency of the employees' use of cash registers and tapes. O Trace deposits in the cash receipts journal to the cash balance in the general ledger.arrow_forwardWhich of the following control activities would best protect against the preparation ofimproper or inaccurate cash disbursements?a. All checks must be signed by an officer designated by the board of directors.b. All signed checks must be reviewed and compared with supporting documentation by thetreasurer before mailing.c. All checks must be sequentially numbered and accounted for by internal auditors.d. All checks must be perforated or otherwise effectively canceled when they are returnedwith the bank statement.arrow_forward
- Which of the following is an internal control guideline for better management of cash receipts? a.Endorse checks immediately upon receipt with the stamp "For Receipt Only". b.Maintain separation of duties between cash handling and cash recording. c.A bookkeeper should be designated to open all the mail in a company. d.Post cash receipts to the Accounts Payable account as soon as possible.arrow_forwardWhich of the following generally would be considered good internal control of cash disbursements? a. Make all cash disbursements using cash rather than debit cards or credit cards. b. Set maximum purchase limits on debit cards and credit cards. c. The employee responsible for making cash disbursements should be in charge of cash receipts. d. The employee who authorizes payments should also prepare the check.arrow_forwardCash receipts should be deposited on the day of receipt or the following business day. Select the most appropriate audit procedure to determine that cash is promptly deposited. a. Review the functions of cash receiving and disbursing for proper separation of duties. b. Review cash register tapes prepared for each sale. c. Review the functions of cash handling and maintaining accounting records for proper segregation of duties. d. Compare the daily cash receipts totals with the bank depositsarrow_forward
- At Emerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts? Physical controls. Documentation procedures. Mechanical controls. Segregation of duties.arrow_forwardin testing controls over cash disbursements, an auditor most likely would determine that the person who signs the check also : a. Approves the voucher for payment b. stamps, perforates or cancel supporting documents c. is denied access to supporting documents d. returns the check to accounts payablearrow_forwardWhich of the following is not a reason why paying by check is an important internal control? A. The check must be signed by an authorized official. B. The check provides a record of the payment. ○ C. Before signing the check, the purchasing agent reviews the invoice or other evidence supporting the payment. OD. All of the above statements are correct.arrow_forward
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