Exercise 2 Several controls currently used at the Ayuyao Inn are listed below: Preventive/ Accounting/ Control 1. The employee time clock is located just outside the manager's office. 2. The Ayuyao Inn uses a cash register. 3. Only the front office supervisor may approve room sales allowance. 4.An external auditor conducts a surprise cash audit quarterly. 5. Cash drawers must be closed after each sale in all Detective Administrative revenue centers. 6. Supplier invoices are reconciled to the suppliers' monthly statements. 7. Vegetables are stored in coolers at the proper temperatures. 8. Cash receipts are deposited intact and on a daily basis. 9. Each room attendant's work in cleaning rooms is inspected by a housekeeping supervisor. 10. The internal auditor prepares the monthly bank reconciliation. Required: 1. Indicate whether each control is preventive (P) or detective (D) and whether it is an accounting (AC) or administrative (AD) control. 2. If you believe a given control may be both P and D or AC and AD, provide your reasoning.

Exercise 2 Several controls currently used at the Ayuyao Inn are listed below: Preventive/ Accounting/ Control 1. The employee time clock is located just outside the manager's office. 2. The Ayuyao Inn uses a cash register. 3. Only the front office supervisor may approve room sales allowance. 4.An external auditor conducts a surprise cash audit quarterly. 5. Cash drawers must be closed after each sale in all Detective Administrative revenue centers. 6. Supplier invoices are reconciled to the suppliers' monthly statements. 7. Vegetables are stored in coolers at the proper temperatures. 8. Cash receipts are deposited intact and on a daily basis. 9. Each room attendant's work in cleaning rooms is inspected by a housekeeping supervisor. 10. The internal auditor prepares the monthly bank reconciliation. Required: 1. Indicate whether each control is preventive (P) or detective (D) and whether it is an accounting (AC) or administrative (AD) control. 2. If you believe a given control may be both P and D or AC and AD, provide your reasoning.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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