Explanation (1) The internal control procedures a, b, e, and f are the strengths over the cash. (2) The following are the weakness in the internal control procedures over the cash: (c) Employees must be strictly not allowed to use the petty cash fund for personal expenses. Also, post-dated checks should not be accepted. (d) When the clerks require using their own funds to make the cash shortages in their register, then they attempt to short-change the customers. This is done to avoid any shortages at the end of day. There can also be circumstances, where overage of money may occur. So, further when this occurs regularly, customers will make complaints. Thus, one needs to report them end of each day and when this becomes a regular issue, then remedial action needs to taken...

14th Edition

ISBN: 9781305653535

Author: Carl Warren, James M. Reeve, Jonathan Duchac

Publisher: Cengage Learning

See similar textbooks

Question

Chapter 7, Problem 7.1APR

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.

The following are the internal control principles:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To indicate:

(1) Whether procedures of internal control over cash represents strength.

(2) Whether procedures of internal control over cash represents weakness.

Expert Solution & Answer

Chapter 7 Solutions

Corporate Financial Accounting

Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Prob. 3DQ Ch. 7 - Why should the responsibility for maintaining the...Ch. 7 - Assume that Brooke Miles, accounts payable clerk...Ch. 7 - Prob. 6DQ Ch. 7 - Prob. 7DQ Ch. 7 - Prob. 8DQ Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ

Ch. 7 - Prob. 7.1BE Ch. 7 - Prob. 7.2BE Ch. 7 - Prob. 7.3BE Ch. 7 - Prob. 7.4BE Ch. 7 - Prob. 7.1EX Ch. 7 - Prob. 7.2EX Ch. 7 - Prob. 7.3EX Ch. 7 - Prob. 7.4EX Ch. 7 - Prob. 7.5EX Ch. 7 - Prob. 7.6EX Ch. 7 - Prob. 7.7EX Ch. 7 - Prob. 7.8EX Ch. 7 - Prob. 7.9EX Ch. 7 - Prob. 7.10EX Ch. 7 - Prob. 7.11EX Ch. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Prob. 7.14EX Ch. 7 - Prob. 7.15EX Ch. 7 - Prob. 7.16EX Ch. 7 - Prob. 7.17EX Ch. 7 - Prob. 7.18EX Ch. 7 - Prob. 7.19EX Ch. 7 - Prob. 7.20EX Ch. 7 - Prob. 7.21EX Ch. 7 - Prob. 7.22EX Ch. 7 - Prob. 7.23EX Ch. 7 - Prob. 7.24EX Ch. 7 - Prob. 7.1APR Ch. 7 - Prob. 7.2APR Ch. 7 - Prob. 7.3APR Ch. 7 - Prob. 7.4APR Ch. 7 - Prob. 7.5APR Ch. 7 - Prob. 7.1BPR Ch. 7 - Prob. 7.2BPR Ch. 7 - Prob. 7.3BPR Ch. 7 - Prob. 7.4BPR Ch. 7 - Prob. 7.5BPR Ch. 7 - Prob. 7.1ADM Ch. 7 - Prob. 7.2ADM Ch. 7 - Prob. 7.3ADM Ch. 7 - Nike, lululemon, and Under Armour: Days cash on...Ch. 7 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 7 - Prob. 7.3TIF

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.

Recommended textbooks for you

Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning