Source Documents: It is a document which contains the details of transaction in which organization enters. It contains all original documents, all data and records related to that transaction or event. Source document is the base for the transaction recording. To Identify: Information useful in recording each event.

Question

Identify the internal control principle that was violated in each of the following separate situations. a. The recordkeeper left town after the owner discovered a large sum of money had disappeared. An audit found that the recordkeeper had written and signed several checks made payable to his fiancée and recorded the checks as salaries expense. b. An employee was put in charge of handling cash. That employee later stole cash from the business. The company incurred an uninsured loss of $184,000. c. There is $500 in cash missing from a cash register drawer. Three salesclerks shared the cash register drawer, so the owner cannot determine who is at fault.

Answer 1

Question

Chapter 3, Problem 3.5.3AAMCP

To determine

Concept Introduction:

Source Documents: It is a document which contains the details of transaction in which organization enters. It contains all original documents, all data and records related to that transaction or event. Source document is the base for the transaction recording.

To Identify: Information useful in recording each event.

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Identify the internal control principle that was violated in each of the following separate situations. a. The recordkeeper left town after the owner discovered a large sum of money had disappeared. An audit found that the recordkeeper had written and signed several checks made payable to his fiancée and recorded the checks as salaries expense. b. An employee was put in charge of handling cash. That employee later stole cash from the business. The company incurred an uninsured loss of $184,000. c. There is $500 in cash missing from a cash register drawer. Three salesclerks shared the cash register drawer, so the owner cannot determine who is at fault.

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