Determine whether each cash payment procedure is an internal control strength or weakness. Cash payments Strength or Weakness In the voucher system, the company's accounting department requests purchases of 1. inventory and records the transaction. 2. A voucher system is used for all payments of liabilities. Weakness Strength 3. When the owner is out of town, the recordkeeper is in charge of signing checks. Weakness 4. The owner of a small business has authority to write and sign checks. Strength 5. To save time, all departments are allowed to incur liabilities. Weakness 6. Payments over $100 are made by check.
Determine whether each cash payment procedure is an internal control strength or weakness. Cash payments Strength or Weakness In the voucher system, the company's accounting department requests purchases of 1. inventory and records the transaction. 2. A voucher system is used for all payments of liabilities. Weakness Strength 3. When the owner is out of town, the recordkeeper is in charge of signing checks. Weakness 4. The owner of a small business has authority to write and sign checks. Strength 5. To save time, all departments are allowed to incur liabilities. Weakness 6. Payments over $100 are made by check.
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
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ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter4: Managing Your Cash And Savings
Section: Chapter Questions
Problem 4LO
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Transcribed Image Text:Determine whether each cash payment procedure is an internal control strength or weakness.
Cash payments
Strength or Weakness
In the voucher system, the company's accounting department requests purchases of
1.
inventory and records the transaction.
2. A voucher system is used for all payments of liabilities.
Weakness
Strength
3. When the owner is out of town, the recordkeeper is in charge of signing checks.
Weakness
4. The owner of a small business has authority to write and sign checks.
Strength
5. To save time, all departments are allowed to incur liabilities.
Weakness
6. Payments over $100 are made by check.
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Internal control is an important part of every organization. It helps in maintaining the efficiency of the management. It is a policy used by the management to avoid fraudulent behavior and increasing accountability in the organization. It ensures that the management is moving on a right path and does not deviate from it. The main aim of internal control is safeguard the assets of an organization.
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