FINANCIAL AND MANAGERIAL ACCOUNTING
9th Edition
ISBN: 2818440048890
Author: Wild
Publisher: MCG CUSTOM
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Chapter 6, Problem 6QS
1.
To determine
Concept Introduction:
Internal Controls: Internal controls are the systems, guidelines, and practices that a business uses to guarantee the accuracy of its financial and accounting data, foster accountability, and prevent fraud.
The internal control strength and weaknesses of certain transactions.
2.
To determine
Concept Introduction:
Internal Controls: Internal controls are the systems, guidelines, and practises that a business uses to guarantee the accuracy of its financial and accounting data, foster accountability, and prevent fraud.
The internal control strength and weaknesses of certain transactions.
3.
To determine
Concept Introduction:
Internal Controls: Internal controls are the systems, guidelines, and practices that a business uses to guarantee the accuracy of its financial and accounting data, foster accountability, and prevent fraud.
The internal control strength and weaknesses of certain transactions.
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Students have asked these similar questions
Each of the following measures strengthens internal controlover cash receipts except:a. Factoring accounts receivable.b. Preparation of a daily listing of all checks receivedthrough the mail.c. The deposit of cash receipts in the bank on a daily basis.d. The use of cash registers.
Douglas and Son, Inc., uses the following process for its cash receipts: The company typically receives cash and check sales each day and places them in a single drawer. Each Friday, the cash clerk records the amount of cash received and deposits the money in the bank account. Each quarter, the controller requests information from the bank necessary to prepare a bank reconciliation.Required:Discuss Douglas and Son’s internal control procedures related to cash receipts, noting both weaknesses and strengths.
Review the internal controls over cash receipts by mail. Exactly what is accomplished by the final step in the process, performed by the controller?
In the final step of the control process the controller compares the records of the day's cash receipts, as follows:
(What would the controller look at to see the amount of cash that went into the bank, and who would provide him with the backup?)
1.
amount from the
(What would the controller look at to see what was recorded by the Company, and who would provide him with the data?)
2.
from the
This comparison ensures
Chapter 6 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
Ch. 6 - Prob. 1QSCh. 6 - Prob. 2QSCh. 6 - Prob. 3QSCh. 6 - Prob. 4QSCh. 6 - Prob. 5QSCh. 6 - Prob. 6QSCh. 6 - Prob. 7QSCh. 6 - Prob. 8QSCh. 6 - Prob. 9QSCh. 6 - Prob. 10QS
Ch. 6 - Prob. 11QSCh. 6 - Prob. 12QSCh. 6 - Prob. 13QSCh. 6 - Prob. 14QSCh. 6 - Prob. 15QSCh. 6 - Prob. 16QSCh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 1PSACh. 6 - Prob. 2PSACh. 6 - Prob. 3PSACh. 6 - Prob. 4PSACh. 6 - Prob. 5PSACh. 6 - Prob. 1PSBCh. 6 - Prob. 2PSBCh. 6 - Prob. 3PSBCh. 6 - Prob. 4PSBCh. 6 - Prob. 5PSBCh. 6 - Prob. 6SPCh. 6 - Prob. 1GLPCh. 6 - Prob. 1.1AACh. 6 - Prob. 1.2AACh. 6 - Prob. 1.3AACh. 6 - Prob. 1.4AACh. 6 - Prob. 1.5AACh. 6 - Prob. 2.1AACh. 6 - Prob. 2.2AACh. 6 - Prob. 3.1AACh. 6 - Prob. 3.2AACh. 6 - Prob. 3.3AACh. 6 - Prob. 3.4AACh. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQCh. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Harriet Knox, Ralph Patton, and Marcia Diamond...Ch. 6 - Prob. 2BTNCh. 6 - Prob. 3BTNCh. 6 - Prob. 4BTN
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- XYZ Company has considerable cash collections on a regular basis. The cashier receives the cash, records it and then banks it at the end of each day. Since a single person is responsible for access to cash, the financial director is concerned that fraud and error may occur in cash handling and recording. Suggest the financial director several internal controls to prevent such errors or misappropriations? (at least 3 controls).arrow_forwardMatch each of the following cash payment activities to the internal control principle to which itbest relates. Enter the appropriate letter in the space provided.1. The business manager has the only key to thecheck-signing equipment.2. The purchasing manager orders all goods andservices for the business.3. A bank reconciliation is prepared monthly.4. Prenumbered checks are used for all payments.5. The company asks suppliers to deliver their merchandise to the warehouse but mail their invoicesto the accounting department.A. Establish responsibilityB. Segregate dutiesC. Restrict accessD. Document proceduresE. Independently verifyarrow_forwardWhich of the following can be considered as an effective control of cash?A. One person handles the receipts and disbursements of cash.B. Cash is deposited monthly into a bank.C. There is approval of cash payments.D. A reconciliation of the bank balance with the cash balance is prepared twice a year.arrow_forward
- Evaluating Internal Control of Cash The following procedures were recently installed by Raspberry Creek Company: a. After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing. b.The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer's office for approval. c. Along with petty cash expense receipts for postage, office supplies, etc., several postdated employee checks are in the petty cash fund. d. At the end of the day, cash register clerks are required to use their own funds to make up any cash shortages in their registers. e. At the end of each day, all cash receipts are placed in the bank's night depository. f. At the end of each day, an accounting clerk compares the…arrow_forwardMatch each of the following cash receipt activities to the internal control principle to which it bestrelates. Enter the appropriate letter in the space provided.1. A list of checks received in the mail is prepared.2. Total cash receipts are compared to the amounton the bank deposit slip.3. A password is required to open the cash register.4. Price changes at the checkout require a manager’sapproval.5. Cashiers are required to count the cash in theirregister at the beginning and end of each shift.A. Establish responsibilityB. Segregate dutiesC. Restrict accessD. Document proceduresE. Independently verifyarrow_forwardRosenquist Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure. a. All over-the-counter receipts are entered in cash registers. Human Resource Controls Segregation of Duties Establishment of Responsibility Independent Internal Verification b. All cashiers are bonded. Documentation Procedures Physical Controls C. Daily cash counts are made by cashier department supervisors. The duties of receiving cash, recording cash, and custody of cash are assigned to d. different individuals. e. Only cashiers may operate cash registers.arrow_forward
- Which of the following is not an example of control procedures to safeguard cash received from accounts receivables? A.All receipts of cash should be recorded in the cash acount B.Employees keep records of all the receipts,with details of the amount received C.One employee is in charge of receiving cash and another employee in charge of preparing accouting records D.One employee should be responsible for collecting and banking cash receipts on a daily basisarrow_forwardKiting would least likely be detected by: a. Analyzing details of large cash deposits around year end. b. Comparing customer remittance advices with recorded disbursements in the cash disbursements journal. c. Preparing a four-column bank reconciliation for all major cash accounts. d. Preparing a schedule of interbank transfers by using the client's records and bank statements around year end.arrow_forwardJanice Dodds opens the mail for Ajax Plumbing Company. She lists all customer checks on a spreadsheet that includes the name of the customer and the check amount. The checks, along with the spreadsheet, are then sent to Jim Seymour in the accounting department, who records the checks and deposits them daily in the company’s checking account. Required: Describe how the company could improve its internal control procedure for the handling of its cash receipts.arrow_forward
- For each of the following independent situations, indicate whether there is an apparent internal control weakness, and, if one exists, suggest alternative procedures to eliminate the weakness. 1. John Smith is the petty cash custodian. John approves all requests for payment out of the $200 fund, which is replenished at the end of each month. At the end of each month, John submits to his supervisor a list of all accounts and amounts to be charged, along with supporting documentation. Once the supervisor indicates approval, a check is written to replenish the fund for the total amount. John's supervisor performs surprise counts of the fund to ensure that the cash and/or receipts equal $200 at all times. 2. All of the company's cash disbursements are made by check. Each check must be supported by an approved voucher, which is in turn supported by the appropriate invoice and, for purchases, a receiving document. The vouchers are approved by Dean Leiser, the chief accountant, after…arrow_forwardIdentify the internal control procedures applicable to cash receipts for Ferguson Company in each of the following cases. 1. All cashiers are bonded. Documentation Procedures Physical Controls Segregation of Duties Establishment of Responsibility Human Resource Controls 2. The treasurer compares the total cash receipts to the bank deposit daily. Independent Internal Verification 3. The bookkeeper records cash receipts, which are held by the treasurer. 4. Only the treasurer holds cash receipts. 5. Deposit slips are completed for each deposit.arrow_forwardPennington Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure. a. Company checks are prenumbered. Documentation Procedures Physical Controls Establishment of Responsibility Human Resource Controls Segregation of Duties Independent Internal Verification b. The bank statement is reconciled monthly by an internal auditor. C. Blank checks are stored in a safe in the treasurer's office. d. Only the treasurer or assistant treasurer may sign checks. е. Check-signers are not allowed to record cash disbursement transactions.arrow_forward
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