Below are descriptions of internal control problems of Zizi Clothing Enterprise. 1. Cash shortages are not discovered because there is no daily cash counts by supervisors. 2. Some cash payments are not recorded because cheques are not prenumbered. Discouraging employees from taking paid vacations. 4. 3. The same person opens incoming mail and posts the accounts receivable subsidiary ledger. The person who is authorized to sign cheques approves purchase orders for payment. 6. 5. Three people handle cash sales from the same cash register drawer. A clothing store is experiencing a high level of inventory shortages because people try on clothing and walk out of the store without paying for the merchandise. 8. 7. The treasurer of the company has not taken a vacation for over 20 years. Required: Identify the internal control principles that is related to the problems above.
Below are descriptions of internal control problems of Zizi Clothing Enterprise. 1. Cash shortages are not discovered because there is no daily cash counts by supervisors. 2. Some cash payments are not recorded because cheques are not prenumbered. Discouraging employees from taking paid vacations. 4. 3. The same person opens incoming mail and posts the accounts receivable subsidiary ledger. The person who is authorized to sign cheques approves purchase orders for payment. 6. 5. Three people handle cash sales from the same cash register drawer. A clothing store is experiencing a high level of inventory shortages because people try on clothing and walk out of the store without paying for the merchandise. 8. 7. The treasurer of the company has not taken a vacation for over 20 years. Required: Identify the internal control principles that is related to the problems above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Below are descriptions of internal control problems of Zizi Clothing Enterprise.
Cash shortages are not discovered because there is no daily cash counts by supervisors.
Some cash payments are not recorded because cheques are not prenumbered.
Discouraging employees from taking paid vacations.
4.
1.
2.
3.
The same person opens incoming mail and posts the accounts receivable subsidiary
ledger.
5.
The person who is authorized to sign cheques approves purchase orders for payment.
Three people handle cash sales from the same cash register drawer.
A clothing store is experiencing a high level of inventory shortages because people try on
clothing and walk out of the store without paying for the merchandise.
The treasurer of the company has not taken a vacation for over 20 years.
6.
7.
8.
Required: Identify the internal control principles that is related to the problems above.
. ... .... ........ .......
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