Answered: Why should the responsibility for a…

Business

Accounting

Why should the responsibility for a sequence of related operations be divided among different persons? Explain.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 6TP: A bank reconciliation takes time and must balance. An employee was struggling in balancing the bank...

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Question

Why should the responsibility for a sequence of related operations be divided among different persons? Explain.
The ticket seller at a movie theater doubles as a ticket taker for a few minutes each day while the ticket taker is on a break. Which control procedure of a business’s system of internal control is violated in this situation?
Do items reported as a credit memorandum on the bank statement represent (a) additions made by the bank to the company’s balance or (b) deductions made by the bank from the company’s balance? Explain.

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The ticket seller at a movie theater doubles as a ticket taker for a few minutes each day while the ticket taker is on a break. Which control procedure of a business’s system of internal control is violated in this situation?

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Similar questions

A bank reconciliation takes time and must balance. An employee was struggling in balancing the bank reconciliation. Her supervisor told her to plug (make an unsupported entry for) the difference, record to Miscellaneous Expense, and simply move on. Discuss the internal controls problem with this directive.
There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records? A. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments.
Requiring an employee who does not handle accounting records to open the mail is an example of A.bank reconcilation B.cash security C.delegation of work D.seperation of duties
Think about internal control over receivables collections. What task must be delegated to a company's credit department in order to protect its cash? What can a credit department employee do to harm the organization if this task is performed by the credit department?
1. Which one of the following reflects a weak internal control system? 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 of cash 2. The debit balance in Cash Short and Over at the end of an accounting period is reported as A. income on the income statement B. an asset on the balance sheet C. an expense on the income statement D. a liability on the balance sheet 3. A bank reconciliation should be prepared periodically because A. the bank must make sure that its records are correct B. any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected C. the bank has not recorded all of its transactions D. the company's records and the bank's records are in agreement
Which of the following statements is correct? Select one: a. Account receivable turnover is equal to net credit sales divided by average net accounts receivable. b. Buying aged receivables from businesses and then collects the payments directly from the customers is called Allowance for uncollectible accounts. c. Auto generated document numbers is a fraud preventive method which is more efficient than physical controls. d. If the same people are responsible for a series of related accounting activities is called Segregation of Duties.
Which of the following is a reason that businesses use bank accounts as part of their internal control measures. a.The bank records incoming checks as liabilities. b.Customer’s returned checks can be charged an NSF fee. c.Differences between the company balance and the bank balance will automatically indicate fraud. d.Bank accounts are an independent record of cash transactions.
Which of the following is supported with a debit memorandum? a.proceeds of bank loan b.collections already forwarded to the bank for deposit but too late to appear in the bank statement c.matured time deposits transferred by bank to the current account d.notes receivable collected by the bank in favor of the depositor e.charges for penalty
In your view, what would cause the cash book of an enterprise to disagree with the bank statement at the of month? Explain what you would include under Cost of sales of an enterprise during the preparation of final accounts for your organization?
Which of the following is NOT an issue with the Bradmark internal controls as it pertains to the revenue cycle? James Walker authorizes and executes transactions. The credit manager verbally authorizes credit increases. The warehouse clerk has access to assets and record keeping. Mary receives checks and remittances from the customer.
A bank reconciliation statement is a statements that is 券 Drawn up by the business to verify the cash book balance with the bank statement balance ODrawn up by the bank to verify the cash book O Sent by the bank when the business has made an error O Sent by the bank when the account is overdrawn.
Which of the following is not a generally recognized internal control activity? Oa. limiting access to computerized accounting records Ob. reducing the cost of hiring seasonal employees Oc. preparation of bank reconciliations on a monthly basis Od. establishment of clear lines of authority to carry out specific tasks