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

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Question

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
Establishment of responsibility
Segregation of duties
Physical control devices
Documentation procedures
e. Independent internal verification
a.
b.
C.
d.
f.
Human resource controls

1.
2.
3.
4.
5.
6.
7.
Possible Errors or Problems
An employee steals the cash collected from a customer for an account receivable and
conceals this theft by issuing a credit memorandum indicating that the customer returned the
merchandise.
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 fear
of detection.
A salesclerk in serving customers often rings up a sale for less than the actual amount and
then 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 the
balance kept on hand.
Each cashier counts his own register drawer each day and verbally reports the results to the
supervisor.
Cashiers with over 5-years experience are not bonded.
Internal Control Principles

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