1.
Suggest a control to prevent it from happening for the misstatement, if a bill from a supplier was paid even though the shipment was not received.
2.
Suggest a control to prevent it from happening for the misstatement, if a supplier’s bill was paid twice for the same purchase.
3.
Suggest a control to prevent it from happening for the misstatement, if a plant employee increased the pay rate by entering the computer system using a plant terminal and altering the payroll records.
4.
Suggest a control to prevent it from happening for the misstatement, if the cash receipts clerk kept a portion of the regular bank deposits for personal use and concealed the theft by manipulating the monthly bank reconciliation prepared.
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College Accounting, Chapters 1-27
- 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_forwardAuthorization of transactions is a key control in most organizations. Authorizations should not be made by individuals who have incompatible functions. For each transaction (listed as A through I), indicate the individual or function (e.g., the head of a particular department) that should have the ability to authorize that transaction. Briefly provide a rationale for your answer. a. Writing off old accounts receivable. B. Committing the organization to acquire another company that is half the size of the existing company. C. Paying an employee for overtime. D. Shipping goods on account to a new customer. E. Purchasing goods from a new vendor. F. Temporarily investing funds in common stock investments instead of money market funds. G. Purchasing a new line of manufacturing equipment to remodel a production line at one of the company’s major divisions (the purchase represents a major new investment for the organization). H. Replacing an older machine at one of the company’s major divisions. I. Rewriting the company’s major computer program for processing purchase orders and accounts payable (the cost of rewriting the program will represent one quarter of the organization’s computer development budget for the year).arrow_forward
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