a.
1.
Explain the ways by which F’s misappropriation could be discovered.
2.
Explain the other way by which F’s misappropriation could be discovered, if the subsidiary ledger is destroyed by F.
3.
Explain the other way by which F’s misappropriation could be discovered, if F posted the payment received from Customer A in the subsidiary ledger and opened another fictitious account for $200.
4.
Explain the reasons for F being very anxious to open the mail receipts from customers every morning.
5.
Explain the reasons for F desiring to have authority over writing off the uncollectible accounts receivable.
b.
Describe the way in which, a free doughnut that is given free when the prominent sign is displayed is the internal control device for the shop.
c.
Mention the internal control procedures that should prevent the money embezzlement.
d.
Mention the internal control weakness in the procedures in the given situation, and mention the procedures that could strengthen the control procedures.

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Chapter 7 Solutions
Financial Accounting for Undergr. -Text Only (Instructor's)
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