The following is an excerpt from a conversation between two salesclerks, Jean Moen and Sara Cheney. Jean and Sara are employed by Turpin Meadows Electronics, a locally owned and operated electronics retail store. Jean: Did you hear the news? Sara: What news? Jean: Neal and Linda were both arrested this morning. Sara: What? Arrested? You’re putting me on! Jean: No, really! The police arrested them first thing this morning. Put them in handcuffs, read them their rights—the whole works. It was unreal! Sara: What did they do? Jean: Well, apparently they were filling out merchandise refund forms for fictitious customers and then taking the cash. Sara: I guess I never thought of that. How did they catch them? Jean: The store manager noticed that returns were twice that of last year and seemed to be increasing. When he confronted Neal, he became flustered and admitted to taking the cash, apparently more than $9,000 in just three months. They’re going over the transactions of the last six months to try to determine how much Linda stole. She apparently started stealing first. Suggest appropriate control procedures that would have prevented or detected the theft of cash.

BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter 8, Problem 6CP
Textbook Problem

The following is an excerpt from a conversation between two salesclerks, Jean Moen and Sara Cheney. Jean and Sara are employed by Turpin Meadows Electronics, a locally owned and operated electronics retail store.

Jean: Did you hear the news?

Sara: What news?

Jean: Neal and Linda were both arrested this morning.

Sara: What? Arrested? You’re putting me on!

Jean: No, really! The police arrested them first thing this morning. Put them in handcuffs, read them their rights—the whole works. It was unreal!

Sara: What did they do?

Jean: Well, apparently they were filling out merchandise refund forms for fictitious customers and then taking the cash.

Sara: I guess I never thought of that. How did they catch them?

Jean: The store manager noticed that returns were twice that of last year and seemed to be increasing. When he confronted Neal, he became flustered and admitted to taking the cash, apparently more than $9,000 in just three months. They’re going over the transactions of the last six months to try to determine how much Linda stole. She apparently started stealing first.

Chapter 8, Problem 6CP, The following is an excerpt from a conversation between two salesclerks, Jean Moen and Sara Cheney. Suggest appropriate control procedures that would have prevented or detected the theft of cash.

Expert Solution

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 8 Solutions

Financial Accounting
Ch. 8 - Identify each of the following as relating to (a)...Ch. 8 - Identify each of the following as relating to (a)...Ch. 8 - The following items may appear on a bank...Ch. 8 - The following items may appear on a bank...Ch. 8 - The following data were gathered to use in...Ch. 8 - The following data were gathered to use in...Ch. 8 - Prepare journal entries for each of the following:...Ch. 8 - Prepare journal entries for each of the following:...Ch. 8 - Financial data for Otto Company follow: a....Ch. 8 - Financial data for Bonita Company follow: a....Ch. 8 - Using Wikipedia (www.wikipedia.com), look up the...Ch. 8 - Jimmy Pace has recently been hired as the manager...Ch. 8 - Ramonas Clothing is a retail store specializing in...Ch. 8 - Pacific Bank provides loans to businesses in the...Ch. 8 - One of the largest losses in history from...Ch. 8 - An employee of JHT Holdings, Inc., a trucking...Ch. 8 - All-Around Sound Co. discovered a fraud whereby...Ch. 8 - A former chairman, CFO, and controller of...Ch. 8 - The procedures used for over-the-counter receipts...Ch. 8 - Sergio Flores works at the drive-through window of...Ch. 8 - The mailroom employees send all remittances and...Ch. 8 - The actual cash received from cash sales was...Ch. 8 - The actual cash received from cash sales was...Ch. 8 - Abbe Co. is a small merchandising company with a...Ch. 8 - Paragon Tech Company, a communications equipment...Ch. 8 - Identify each of the following reconciling items...Ch. 8 - Identify each of the following reconciling items...Ch. 8 - The following data were accumulated for use in...Ch. 8 - The following data were accumulated for use in...Ch. 8 - Accompanying a bank statement for Santee Company...Ch. 8 - An accounting clerk for Chesner Co. prepared the...Ch. 8 - The following June 30 bank reconciliation was...Ch. 8 - Alaska Impressions Co. records all cash receipts...Ch. 8 - Journalize the entries to record the following: ...Ch. 8 - Mattel, Inc., designs, manufactures, and markets...Ch. 8 - El Dorado Inc. has monthly cash expenses of...Ch. 8 - Capstone Turbine Corporation produces and sells...Ch. 8 - Amicus Therapeutics, Inc., is a biopharmaceutical...Ch. 8 - The following procedures were recently installed...Ch. 8 - Jeremiah Restoration Company completed the...Ch. 8 - The cash account for American Medical Co. at April...Ch. 8 - The cash account for Brentwood Bike Co. at May 1...Ch. 8 - Beeler Furniture Company deposits all cash...Ch. 8 - The following procedures were recently installed...Ch. 8 - Jeremiah Restoration Company completed the...Ch. 8 - The cash account for Stone Systems at July 31...Ch. 8 - The cash account for Collegiate Sports Co. on...Ch. 8 - Sunshine Interiors deposits all cash receipts each...Ch. 8 - Tehra Dactyl is an accountant for Skeds, Inc., a...Ch. 8 - During the preparation of the bank reconciliation...Ch. 8 - Wholesome and Happy Foods is a farm-to-family...Ch. 8 - The following is an excerpt from a conversation...Ch. 8 - The following is an excerpt from a conversation...Ch. 8 - The records of Parker Company indicate a July 31...Ch. 8 - TearLab Corp. is a health care company that...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Describe the three general categories of franchising arrangements.

Foundations of Business (MindTap Course List)

PRESENT VALUE FOR VARIOUS DISCOUNTING PERIODS Find the present value of 500 due in the future under each of the...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

LO1 The purpose of depreciation is to record the assets market value in the accounting records.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Define Web Services.

Pkg Acc Infor Systems MS VISIO CD

I reach out to people from different cultures. 10 9 8 7 6 5 4 3 2 1

Understanding Management (MindTap Course List)