Startup is a very small business. Ethel, the accountant, does all the accounting, answers the phone and does thedaily bank deposit in addition to working the sales desk. A cost effective way for Startup's owner to strengtheninternal controls is toMultiple Choiceseparate the recording and custody function by asking Ethel to list cash receipts as she opensthe mall, before preparing the bank deposithire another accountant to check Ethel's workNone of the other alternatives are correctopen and review the mail him/herselfO segregate duties by insisting that Ethel not update accounts receivable records on the days shemakes bank deposits

Startup is a very small business. Ethel, the accountant, does all the accounting, answers the phone and does the daily bank deposit in addition to working the sales desk. A cost effective way for Startup's owner to strengthen internal controls is to

Startup is a very small business. Ethel, the accountant, does all the accounting, answers the phone and does the daily bank deposit in addition to working the sales desk. A cost effective way for Startup's owner to strengthen internal controls is to

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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Similar questions

Which of the following reflects a weak internal control system? Oa. All employees must take their vacations. Ob. A single employee is responsible for collecting and recording cash. Oc. A single employee is responsible for comparing a receiving report to an invoice. Od. All employees are well supervised.
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Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control violated or followed for each procedure. 1. The owner does not use ID scanners to limit access to expensive merchandise. Instead, the owner argues they hire honest employees. 2. Several salesclerks share the same cash drawer. 3. The company devotes resources towards keeping accurate accounting records for machinery. 4. The company does not allow employees with access to cash to modify accounting records. 5. Employees that handle easily transferable assets such as cash are bonded. Weakness or Strength 1. Weakness 2. Weakness 3. Strength 4. Strength 5. Strength Internal Control Principle
Provide an example of each of the following; Conspicuous consumption Information you will need to fill out an application to rent an apartment A government agency you can contact to file a fraud complaint A way to prevent fraud on your credit card A way to protect yourself from identity theft
Is the following a potential control weakness? A computer network and personal computers support Marco accounting and inventory management systems. Personal computers are located in the offices and warehouse and a central server handles all accounting and inventory files. Printers are located in areas where employees need printed documents and other records routinely. The computer is used to control and process most transactions, to print documents, prepare accounting records, and prepare periodic financial statements. Marco uses commercial software recommended by their auditor. To date, they have had only the usual startup problems. They have used it for two years and have upgraded it once. Briefly explain the potential mistatement and recommended correction.
Able, an accounts payable supervisor for ABC Company, bought supplies for a company he owned on the side. Able entered vouchers in ABC Company’s accounts payable system for the cost of the supplies. Checks were cut to pay for these unauthorized expenses during normal daily check runs. The goods ordered were drop-shipped to a location where Able could collect them. This is an example of: a. An expense reimbursement scheme b. A commission scheme c. A billing scheme d. An invoice kickback scheme
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Alexia Jones is a worker at a local 24-hour pharmacy. Alexia works the night shift and is the only worker. Because management is cost-conscious and business is slow at night, Alexia has been given the responsibility to do the accounting from the previous day. Alexia has two children, and her husband does not work. Alexia has strong pressure to provide well for her family. Is the pharmacy at risk for fraud? Why or why not?
Which of the following reflects a weak internal control system? Please explain with full explanation. a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.
An accounting manager, who has full access to a Company’s accounting system also has access to the bank account and is able to send cash payments without supervision. What is an internal control that should be implemented to reduce the risk of theft or fraud in this company?
Lamar LLC is in the process of updating its revenues and receivables systems with the implementation of new accounting software. James Loden, Inc. is an independent information technology consultant who is assisting Tamar with the project. James has developed the following checklist containing internal control points that the company should consider in this new implementation: Will customer orders be received via the Internet? Are all collections from customers received in the form of checks? Are product quantities monitored regularly?
Is it an entity inherent risk for the information below? A computer network and personal computers support Marco Inc's accounting and inventory management systems. Personal computers are located in the offices and warehouse and a central server handles all accounting and inventory files. Printers are located in areas where employees need printed documents and other records routinely. The computer is used to control and process most transactions, to print documents, prepare accounting records, and prepare periodic financial statements. Marco uses commercial software recommended by their auditor. To date, they have had only the usual startup problems. They have used it for two years and have upgraded it once. If it is an inherent risk, what is the feature of the firm that will possibly affect inherent risk and explain how and why; that is whether it increases or decreases inherent risk. Please address a specific risk to the accuracy of the financial statements with the "how" and whether…