24 MONTH MYLAB (MAN)
7th Edition
ISBN: 9780136503521
Author: MILLER-NOBLES
Publisher: PEARSON
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Question
Chapter 7, Problem 7.13E
To determine
Internal Control: Internal control refers to the policies, and plans of the business organization along with other measures with a view to safeguard its assets, encourage the employees to adhere to the plans, to improve on the operational efficiency, and to ensure correct and reliable accounting information.
To Identify: The missing internal control procedure from the given characteristics.
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Identifying internal controls
Consider each situation separately. Identify the missing internal control procedure from these characteristics:
Assignment of responsibilities
Separation of duties
Audits
Electronic devices
Other controls (specify)
a. While reviewing the records of Quality Pharmacy, you find that the same employee orders merchandise and approves invoices for payment.
b. Business is slow at Amazing Amusement Park on Tuesday, Wednesday, and Thursday nights. To reduce expenses, the business decides not to use a ticket taker on those nights. The ticket seller (cashier) is told to keep the tickets as a record of the number sold.
c. The same trusted employee has served as a cashier for 12 years.
d. When business is brisk, Fast Mart deposits cash in the bank several times during the day. The manager at one store wants to reduce the time employees spend delivering cash to the bank, so he starts a new policy. Cash will build up over weekends, and the total will be deposited on…
Consider each situation separately Identify the missing internal control procedure from these characteristics
•Assignment of responsibilities
•Separation of duties
•Audits
Electronic devices
⚫ Other controls (specify)
(Click the icon to view the situations.)
(Leave the "Reason for "Other" control column blank if "Other controls" is not selected for the "Internal Control Procedure" co
a. While reviewing the records of Quality Pharmacy, you find that the same employee orders merchandise and
approves invoices for payment
b. Business is slow at Amazing Amusement Park on Tuesday, Wednesday, and Thursday nights To
reduce expenses, the business decides not to use a ticket taker on those nights. The ticket seller (cashier) is
told to keep the tickets as a record of the number sold
c. The same trusted employee has served as cashier for 12 years
d. When business is brisk, Fast Mart deposits cash in the bank several times during the day. The manager at one
store wants to reduce the time employees…
When the store manager receives a requisition note, he issues three copies of purchase order. Two
copies of these orders are sent to the vendor and one copy remains in the stores file. When the
goods are received, the store manager matches the purchase order with the invoice and forwards
them to accounts payable department for payment of dues.
Which of the following statement best describes the internal control over the purchasing process?
Inadequate control over accounts payable.
Inadequate segregation of duties.
Inadequate segregation of duties.
Adequate internal control exists.
Chapter 7 Solutions
24 MONTH MYLAB (MAN)
Ch. 7 - Prob. 1QCCh. 7 - Prob. 2QCCh. 7 - Prob. 3QCCh. 7 - Prob. 4QCCh. 7 - Prob. 5QCCh. 7 - Prob. 6QCCh. 7 - Prob. 7QCCh. 7 - Prob. 8QCCh. 7 - Prob. 9QCCh. 7 - Prob. 10QC
Ch. 7 - Prob. 11QCCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - What are the five components of internal control?...Ch. 7 - Prob. 4RQCh. 7 - What is separation of duties?Ch. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - How do businesses control cash receipts by mail?Ch. 7 - Prob. 10RQCh. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Prob. 18RQCh. 7 - Defining internal control Internal controls are...Ch. 7 - Prob. 7.2SECh. 7 - Prob. 7.3SECh. 7 - Prob. 7.4SECh. 7 - Prob. 7.5SECh. 7 - Prob. 7.6SECh. 7 - Prob. 7.7SECh. 7 - Prob. 7.8SECh. 7 - Prob. 7.9SECh. 7 - Prob. 7.10SECh. 7 - Prob. 7.11SECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Evaluating internal control over cash payments...Ch. 7 - Understanding internal control, components,...Ch. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.23ECh. 7 - Prob. 7.24APCh. 7 - Prob. 7.25APCh. 7 - Prob. 7.26APCh. 7 - Prob. 7.27APCh. 7 - Prob. 7.28APCh. 7 - Prob. 7.29APCh. 7 - Prob. 7.30BPCh. 7 - Prob. 7.31BPCh. 7 - Prob. 7.32BPCh. 7 - Prob. 7.33BPCh. 7 - Prob. 7.34BPCh. 7 - Prob. 7.35BPCh. 7 - Prob. 7.36CPCh. 7 - Prob. 7.37PSCh. 7 - Prob. 7.2CTDCCh. 7 - Prob. 7.1CTFCCh. 7 - Prob. 7.1CTCA
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Similar questions
- Fashion Forward, a clothing distributor, wants to ensure it has strong information system controls over the purchasing and payables cycle. Which of the following should be implemented? A. The same person should do the buying and the receiving; however, that person should not have access to the accounting records to ensure appropriate segregation of duties. B. Only accept requisitions against the account code entered by all employees who have identified that goods are needed. ☐ C. There should be a periodic check of invoices where no goods have been received. D. The computer should check the requisition against the inventory master file to confirm that the re-order point has been reached. E. Orders placed for supplies not on the approved list should be accepted if they are needed. F. Receiving should enter the details of goods received on the computer against the order. G. Details of invoices should be entered into the computer on receipt, and the computer will match the invoice with…arrow_forwardCollecting Evidence in a Fraud Examination. A fraud examiner was called into a businessbecause of a suspicion of fraud. An assistant manager in a bookstore is taking books off theshelf, bringing them to the return book area, completing a customer return form, and pocketing the money. This is done late in the day when few other employees are in the store and areinvolved in closing activities that occupy them in other areas.Required:a. What are the objectives of the fraud examiner in performing a fraud examination?b. What evidence could the fraud examiner obtain that would help reach the objectives ofthe audit?c. How should the fraud examiner handle the evidence obtained?arrow_forwardWhich of the following are examples of preventive controls? Select all that apply. O account coding on purchase orders is checked by the computer using a table of valid account numbers computerized accounting system will not allow a sale to be processed if a customer has exceeded its credit limit O quarterly review of credit balances in accounts receivable for reasonableness O sales manager reviews daily shipments, total sales, and sales per unit shipped O sales invoices are priced automatically using a master pricing filearrow_forward
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- The 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_forwardWhich of the following is an example of poor internal control in an organization?a. The company rotates employees through various jobs.b. The accounting department compares goods received with the related purchase order.c. The mailroom clerk records daily cash receipts in the journal.d. Employees must take vacations.arrow_forwardAt most movie theaters, one employee sells tickets and another employee collects them. Onenight, when you’re at the movies, your friend comments that this is a waste of the theater’smoney.Required:1. Identify the name of the control principle to which this situation relates.2. Explain to your friend what kind of fraud could occur if the same person did both jobsarrow_forward
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