EXERCISE 74Subdivision ofCertain subdivisions ef duties are highly desirable for the purpose of achieving areasonable degree of internal control. For each of the following six responsibilities,explain whether or not assignming the duty to an employee who also handles cashreceipts would represent a significant weakness in internal control. Briefly explainyour reasuning.Duties2 Besponsibility for executing both cash and credit sales transactions.b Responsibility for maintaining the general ledger.e Responsibillity for maintaining the accounts receivable subsidiary ledger.d Besponsibility for issuing credit memoranda for sales returns.e Pesponsibility for preparing a control listing of all cash collections.1 Besponsibility for preparing monthly bank reconciliations.

Certain subdivisions e duties are highly desirable for the purpose of achieving a reasonable degree of internal rntrol. For each of the following six responsibilities, explain whether or not assigning the duty to an employee who also handles cash receipts would represent a significant weakness in internal control. Briefly explain your reasornang. a Besponsibility for executing both cash and credit sales transactions. b Responsibility for maintaining the general ledger. : Responsibility for maintaining the accounts receivable subsidiary ledger.

Certain subdivisions e duties are highly desirable for the purpose of achieving a reasonable degree of internal rntrol. For each of the following six responsibilities, explain whether or not assigning the duty to an employee who also handles cash receipts would represent a significant weakness in internal control. Briefly explain your reasornang. a Besponsibility for executing both cash and credit sales transactions. b Responsibility for maintaining the general ledger. : Responsibility for maintaining the accounts receivable subsidiary ledger.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Why do organizations have policies regarding the use of assets and why do staff need to be aware of them and other organizational policies, procedures and accounting standards? Internal control is enhanced by combining the control of a transaction with the record-keeping function.a.True.b. False. For efficiency of operations and better control over cash, a company should maintain only one bank account. i. True. ii. False.
Which of the following reflects a weak internal control system? Please explain with full explanation. a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.
Help
The following can be appropriately included in an Internal Control Questionnaire for Revenue/Receipt Cycle, except *A. Is the credit department independent of the sales department?B. Are debit or credit memos independently checked against sales invoice data?C. Are accounts receivable periodically reviewed and aged?D. Does the cashier compare the official receipt, deposit slip, and cash receipts journal?E. None of them
William (40% of gains and losses) . . . . . . . . . . . $ 220,000Jennings (40%) . . . . . . . . . . . . 160,000 Bryan (20%) . . . . . . . . . . . . . . 110,00015. Darrow invests $270,000 in cash for a 30 percent ownership interest. The money goes to the original partners. Goodwill is to be recorded. How much goodwill should be recognized, and what is Darrow’s beginning capital balance? Choose the correct.a. $410,000 and $270,000b. $140,000 and $270,000c. $140,000 and $189,000d. $410,000 and $189,000
Assess the following statement as true or false. Enter T for true or F for false. 1. 2. 3. 4. Bank reconciliation is one of documentation procedure control. A cash budget contributes to more effective internal control. of segregation of duties. 5. to apply. Allow only one check signer has access to cash recording is an example The assumption of inventory method (i.e. FIFO etc.) may not match the physical flow of goods. Technology has make the perpetual inventory more popular and easier
Allowing only certain employees to order goods and services for the company is an example of what internal control procedure? a.Proper authorization b.Independent verification c.Segregation of duties d.Safeguarding of assets and records
To enhance internal control in the bank reconciliation process, the bank reconciliation should be prepared O a. with the assistance of the bank's employees. O b. by the supervisor. O c. entirely within the computerized accounting system. O d. by an employee who does not take part in or record cash transactions.
Internal controls associated with the purchases and cash disbursements cycle include: A Separation of duties. B Adequate documentation. C Both separation of duties and adequate documentation. D Neither separation of duties nor adequate documentation.