E9-15 Identifying and correcting internal control weakness
Learning Objective 1 |
Suppose The Right Rig Dealership is opening a regional office in Omaha. Cary Regal, the office manager, is designing the internal
• The credit department runs a credit check on all customers who apply for credit. When an account proves uncollectible, the credit department authorizes the write-off of the
• Cash receipts come into the credit department, which separates the cash received from the customer remittance slips. The credit department lists all cash receipts by customer name and amount of cash received.
• The cash goes to the treasurer for deposit in the bank. The remittance slips go to the accounting department for posting to customer accounts.
• The controller compares the daily deposit slip to the total amount posted to customer accounts. Both amounts must agree.
Recall the components of internal control. Identify the internal control weakness in this situation, and propose a way to correct it.
Learn your wayIncludes step-by-step video
Chapter 9 Solutions
Horngren's Accounting (12th Edition)
Additional Business Textbook Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Operations Management
Financial Accounting: Tools for Business Decision Making, 8th Edition
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Financial Accounting, Student Value Edition (5th Edition)
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