QUESTION 6P8.1A (LO 1, 2) Bolz Office Supply Company recently changed its system of internalcontrol over cash disbursements. The system includes the following features.Identify internal control principles over cash disbursements.Instead of being unnumbered and manually prepared, all checks must now beprenumbered and prepared by using the new accounts payable software purchasedby the company. Before a check can be issued, each invoice must have the approvalof Kathy Moon, the purchasing agent, and Robin Self, the receiving departmentsupervisor. Checks must be signed by either Jennifer Edwards, the treasurer, orRich Woodruff, the assistant treasurer. Before signing a check, the signer isexpected to compare the amount of the check with the amount on the invoice.After signing a check, the signer stamps the invoice PAID and inserts within thestamp, the date, check number, and amount of the check. The "paid" invoice is thensent to the accounting department for recording.Blank checks are stored in a safe in the treasurer's office. The combination to thesafe is known only by the treasurer and assistant treasurer. Each month, the bank3statement is reconciled with the bank balance per books by the assistant chiefaccountant. All employees who handle or account for cash are bonded.InstructionsIdentify the internal control principles and their application to cash disbursements ofBolz Office Supply Company.

Internal Control:- It is the process in which a company puts a check on their employees for each…

safe is known only by the treasurer and assistant treasurer. Each month, the bank statement is reconciled with the bank balance per books by the assistant chief accountant. All employees who handle or account for cash are bonded. Instructions Identify the internal control principles and their application to cash disbursements of Bolz Office Supply Company.

safe is known only by the treasurer and assistant treasurer. Each month, the bank statement is reconciled with the bank balance per books by the assistant chief accountant. All employees who handle or account for cash are bonded. Instructions Identify the internal control principles and their application to cash disbursements of Bolz Office Supply Company.

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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