Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 7, Problem 2DQ
To determine
Internal Control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the some of the internal control procedures:
- Competent personnel, rotating duties, and mandatory vacations
- Separating responsibilities for related operations
- Separating operations, custody of assets, and accounting
- Proofs and security measures
To determine: The reason for not one person must not handle the cash receipts should not responsible for managing the records of accounts receivables.
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Why should the person in charge of cash receipts not also be in charge of keeping accounts receivable records? Explain.
Why should cash receipts and sales to credit clients be documented and reported immediately?
Where in the cash receipts process does supervision play an important role?
Chapter 7 Solutions
Corporate Financial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Why should the responsibility for maintaining the...Ch. 7 - Assume that Brooke Miles, accounts payable clerk...Ch. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - Prob. 7.1EXCh. 7 - Prob. 7.2EXCh. 7 - Prob. 7.3EXCh. 7 - Prob. 7.4EXCh. 7 - Prob. 7.5EXCh. 7 - Prob. 7.6EXCh. 7 - Prob. 7.7EXCh. 7 - Prob. 7.8EXCh. 7 - Prob. 7.9EXCh. 7 - Prob. 7.10EXCh. 7 - Prob. 7.11EXCh. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Prob. 7.14EXCh. 7 - Prob. 7.15EXCh. 7 - Prob. 7.16EXCh. 7 - Prob. 7.17EXCh. 7 - Prob. 7.18EXCh. 7 - Prob. 7.19EXCh. 7 - Prob. 7.20EXCh. 7 - Prob. 7.21EXCh. 7 - Prob. 7.22EXCh. 7 - Prob. 7.23EXCh. 7 - Prob. 7.24EXCh. 7 - Prob. 7.1APRCh. 7 - Prob. 7.2APRCh. 7 - Prob. 7.3APRCh. 7 - Prob. 7.4APRCh. 7 - Prob. 7.5APRCh. 7 - Prob. 7.1BPRCh. 7 - Prob. 7.2BPRCh. 7 - Prob. 7.3BPRCh. 7 - Prob. 7.4BPRCh. 7 - Prob. 7.5BPRCh. 7 - Prob. 7.1ADMCh. 7 - Prob. 7.2ADMCh. 7 - Prob. 7.3ADMCh. 7 - Nike, lululemon, and Under Armour: Days cash on...Ch. 7 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 7 - Prob. 7.3TIF
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Similar questions
- What should be done if differences are found between the bank statement and the book account?arrow_forwardThink 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?arrow_forwardWhat feature of the acquisition and expenditure control would be expected to prevent an employeefrom embezzling cash by creating fictitious vouchers?arrow_forward
- Why should cash receipts from credit clients and sales to them be instantly documented and posted?arrow_forwardWhich of the following generally would not be considered good internal control of cash receipts? a. Allowing customers to pay with a debit card. b. Requiring the employee receiving the cash from the customer to also deposit the cash into the company’s bank account. c. Recording cash receipts as soon as they are received. d. Allowing customers to pay with a credit card.arrow_forwardWhat feature of the acquisition and expenditure control would be expected to prevent an employee’s embezzling cash through creation of fictitious vouchers?arrow_forward
- As part of a strong internal control system, which of the following accounting duties needsto be separated from cash handling?a. Record keepingb. Filingc. Transaction approvald. Both a and c need to be separated from cash handling.arrow_forwardWhich of the following statements are true regarding the control of cash receipts and cash payments? Custody over cash should be separate from the recordkeeping of cash.arrow_forwardWhich adjustments need to be recorded in the accounting records? Those that affected the bank balance or the cash account balance in the ledger? What is the result of the adjustments not being recorded?arrow_forward
- What are the common internal controls over cash receipts and cash disbursements?arrow_forwardWhich statement is NOT correct for an expenditure system with proper internal controls?a. Cash disbursements maintain the check register.b. Accounts payable maintains the accounts payable subsidiary ledger.c. Accounts payable is responsible for paying invoices.d. Accounts payable is responsible for authorizing invoices.arrow_forwardWhich of the following would not be considered good internal control for cash receipts? о A) Requiring the employee receiving cash from customers to also deposit the cash into the company's bank account. B) Recording cash receipts as soon as they are received. C) Allowing customers to pay with a credit card. D) Allowing customers to pay with a debit card.arrow_forward
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