Listed below are five procedures followed by Gilmore Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Employees are required to take vacations. Select a weakness in internal control GoodWeak Select a control principle that is violated Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation Procedures 2. Any member of the sales department can approve credit sales. Select a weakness in internal control GoodWeak Select a control principle that is violated Physical ControlsIndependent Internal VerificationDocumentation ProceduresHuman Resource ControlsEstablishment of ResponsibilitySegregation of Duties 3. Paul Jaggard ships goods to customers, bills customers, and receives payment from customers. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation ProceduresIndependent Internal Verification 4. Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities. Select a weakness in internal control GoodWeak Select a control principle that is violated Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures 5. Time clocks are used for recording time worked by employees. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesHuman Resource ControlsEstablishment of ResponsibilityPhysical ControlsIndependent Internal VerificationDocumentation Procedures

Listed below are five procedures followed by Gilmore Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Employees are required to take vacations. Select a weakness in internal control GoodWeak Select a control principle that is violated Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation Procedures 2. Any member of the sales department can approve credit sales. Select a weakness in internal control GoodWeak Select a control principle that is violated Physical ControlsIndependent Internal VerificationDocumentation ProceduresHuman Resource ControlsEstablishment of ResponsibilitySegregation of Duties 3. Paul Jaggard ships goods to customers, bills customers, and receives payment from customers. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation ProceduresIndependent Internal Verification 4. Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities. Select a weakness in internal control GoodWeak Select a control principle that is violated Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures 5. Time clocks are used for recording time worked by employees. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesHuman Resource ControlsEstablishment of ResponsibilityPhysical ControlsIndependent Internal VerificationDocumentation Procedures

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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Procedure	IC Good or Weak?	Related Internal Control Principle
1.	Employees are required to take vacations.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation Procedures
2.	Any member of the sales department can approve credit sales.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Physical ControlsIndependent Internal VerificationDocumentation ProceduresHuman Resource ControlsEstablishment of ResponsibilitySegregation of Duties
3.	Paul Jaggard ships goods to customers, bills customers, and receives payment from customers.	Select a weakness in internal control WeakGood	Select a control principle that is violated Segregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation ProceduresIndependent Internal Verification
4.	Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures
5.	Time clocks are used for recording time worked by employees.	Select a weakness in internal control WeakGood	Select a control principle that is violated Segregation of DutiesHuman Resource ControlsEstablishment of ResponsibilityPhysical ControlsIndependent Internal VerificationDocumentation Procedures

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