Listed below are seven errors or problems that might occur in the processing of cash transactions. Also shown is a list of internalcontrol principles. Evaluate each possible error and cite a principle that is listed that would reduce the probability of the erroroccurring. If none of the principles given will correct the problem, write "None." If you think more than one principle is appropriate, listall principles that apply.Internal Control PrinciplesEstablishment of responsibilitySegregation of dutiesPhysical control devicesDocumentation procedurese. Independent internal verificationa.b.C.d.f.Human resource controls 1.2.3.4.5.6.7.Possible Errors or ProblemsAn employee steals the cash collected from a customer for an account receivable andconceals this theft by issuing a credit memorandum indicating that the customer returned themerchandise.A small fire destroys 3 days of cash receipts.The official designated to sign checks is able to steal blank checks and issue them without fearof detection.A salesclerk in serving customers often rings up a sale for less than the actual amount andthen keeps the additional cash collected from the customer.Three cashiers use one cash register drawer and the cash in the drawer is often short of thebalance kept on hand.Each cashier counts his own register drawer each day and verbally reports the results to thesupervisor.Cashiers with over 5-years experience are not bonded.Internal Control Principles

Internal control It is the process is established to ensure reliable financial reporting and…

Listed below are seven errors or problems that might occur in the processing of cash transactions. Also shown is a list of internal control principles. Evaluate each possible error and cite a principle that is listed that would reduce the probability of the error occurring. If none of the principles given will correct the problem, write "None." If you think more than one principle is appropriate, list all principles that apply. Internal Control Principles a. b. C. d. e. f. Establishment of responsibility Segregation of duties Physical control devices Documentation procedures Independent internal verification. Human resource controls

Listed below are seven errors or problems that might occur in the processing of cash transactions. Also shown is a list of internal control principles. Evaluate each possible error and cite a principle that is listed that would reduce the probability of the error occurring. If none of the principles given will correct the problem, write "None." If you think more than one principle is appropriate, list all principles that apply. Internal Control Principles a. b. C. d. e. f. Establishment of responsibility Segregation of duties Physical control devices Documentation procedures Independent internal verification. Human resource controls

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

Part II Preparing the bank reconciliation is considered to be an important step in the internal control process for cash. It is because the cash balances in the depositor's accounting records and its bank statement usually do not agree. Explain the causes of discrepancies for this situation with a specific example for each cause.
What feature of the acquisition and expenditure control would be expected to prevent an employeefrom embezzling cash by creating fictitious vouchers?
Which of the following is a best practice when handling cash? (A) Always perform background checks on people handling cash (B) Be sure to implement a cash handling process (C) Make sure cash handling procedures are always segregated (D) All of the above
hapters 7-8 i A list of individual accounts with a common characteristic is known as a(n): Multiple Choice Subsidiary ledger. General ledger. Special ledger. All-purpose ledger. Saved Column balance ledger. Help
High level cash management strategies include a.petty cash b.delaying payment for suppliers c.cash over and short d.bank reconciliations
At Radiant, Inc., the sales department is also responsible for recording cash transactions as it does not have a separate accounting department. Which internal control procedure needs strengthening? A. separation of duties B. competent, reliable, and ethical personnel C. assignment of responsibilities D. documents
79 What is a major objective of financial reporting? Group of answer choices To provide information that excludes claims to the resources. To provide information that clearly portrays nonfinancial transactions. To provide information that is useful to assess the amounts, timing, and uncertainty of prospective cash receipts. To provide information that is useful to management in making decisions.
Imurlal LUnTUI amu give an example of each principle that you might observe when picking up your pizza. (Note: It may not be possible to observe all the principles.) E7-3 The following control procedures are used in Keaton Company for over-the-counter cash receipts. List oVE im 1. Each store manager is responeible for interviewing applicants for cashier jobs. They are hired if they seem honest and trastworthy. 2. All over-the-counter receipts are regisiered by three clerks who share a cash register with a single cash drawer. 3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief- case in the stock room until it is deposited in the bank. 4. At the end of each day, the total receipts are counted by the cashier on duty and rec- onciled to the cash register total. 5. The company accountant makes the bank deposit and then records the day's receipts. (L
Identify each of the following statements as either true or false. a. A voucher system of control improves internal control of cash pa b. Separation of duties eliminates the possibility of collusion to stea c. Good internal control is to have only one employee be assigned d. A petty cash system of control is a system used only for cash rec
Which of the following statements are true regarding the control of cash receipts and cash payments? One key to controlling cash payments is to require that no expenditures be made by check; instead, all expenditures should be made from petty cash.
Keeping cash locked away is an example of which control activity? a. Authorization b. Performance reviews • c. Physical control d. Segregation of duties
What internal control technique (s) would protect you against the hazards listed below? To hide the theft of further cash payments from that client, an employee writes down a customer's accounts receivable amount as uncollectible.