Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 8, Problem 9MC
What is the advantage of using technology in the internal
A. Passwords can be used to allow access by employees.
B. Any cash received does not need to be reconciled because the computer tracks all transactions.
C. Transactions are easily changed.
D. Employees cannot steal because all cash transactions are recorded by the computer/cash register.
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Some strategies in management can use to implement controls to ensure the integrity and existence of the client's cash balances. Reconciling cash can be a great control in most cases since receipts tie to deposits so it's accurate and cash exists since it hits the bank account.
Now reconciling on a daily basis is important as well but would you be able to negotiate the cash box if the employee was using a lapping fraud to steal money? If they took $100 of cash and issued a manual receipt to the customer then used the next $100 to come in to clear the AR from the first customer on the cash receipt system, wouldn't I still reconcile?
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The mailroom employees send all remittances and remittance advices to the cashier. The cashier deposits the cash in the bank and forwards the remittance advices and duplicate deposit slips to the Accounting Department.a. Indicate the weak link in internal control in the handling of cash receipts.b. How can the weakness be corrected?
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Chapter 8 Solutions
Principles of Accounting Volume 1
Ch. 8 - Which of the following would a fraudster perceive...Ch. 8 - Internal control is said to be the backbone of all...Ch. 8 - What is the best way for owners of small...Ch. 8 - Which of the following is not considered to be...Ch. 8 - There are several elements to internal controls....Ch. 8 - A company is trying to set up proper internal...Ch. 8 - There are three employees in the accounting...Ch. 8 - Which one of the following documents is not needed...Ch. 8 - What is the advantage of using technology in the...Ch. 8 - Which of the following assets require the...
Ch. 8 - Which of the following is true about the...Ch. 8 - The external auditor of a company has certain...Ch. 8 - Petty cash is used to ________. A. avoid having to...Ch. 8 - A company has decided to start a petty cash fund...Ch. 8 - Which of the following items are found on a book...Ch. 8 - Which of the following are found on the bank side...Ch. 8 - What would be a reason a company would want to...Ch. 8 - What would be a reason a company would want to...Ch. 8 - At what point does revenue recognition occur? A....Ch. 8 - What is an example of perceived opportunity as one...Ch. 8 - What is an example of rationalization as one of...Ch. 8 - What is an example of incentive as one of the...Ch. 8 - Why is it important to have a very sound and...Ch. 8 - The information technology departments of all...Ch. 8 - What are the functions of the internal control?Ch. 8 - Discuss the importance of a company having proper...Ch. 8 - What is the role of the Sarbanes-Oxley Act and the...Ch. 8 - Why is it important to have a petty cash fund...Ch. 8 - Is it required to have only one petty cashier or...Ch. 8 - Technology can be used to support a strong...Ch. 8 - What is the purpose of the bank reconciliation?Ch. 8 - What should be done if differences are found...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - Record the following transactions: A. Started a...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - The bank reconciliation shows the following...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - Using the following information, prepare a bank...Ch. 8 - Prepare the journal entry to reconcile the bank...Ch. 8 - On September 1, French company has decided to...Ch. 8 - On May 2 Kellie Company has decided to initiate a...Ch. 8 - Domingo Company started its business on January 1,...Ch. 8 - Prepare a trial balance using the journal entries...Ch. 8 - Inner Resources Company started its business on...Ch. 8 - PA6. 8.4 Prepare a trial balance using the journal...Ch. 8 - Identify where each of the following transactions...Ch. 8 - Which of the following transactions will require a...Ch. 8 - Domingo Company received the following bank...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - Inner Resources Company received the following...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - On June 1 French company has decided to initiate a...Ch. 8 - On July 2 Kellie Company has decided to initiate a...Ch. 8 - Hajun Company started its business on May 1, 2019....Ch. 8 - Prepare a trial balance using the journal entries...Ch. 8 - Lavender Company started its business on April 1,...Ch. 8 - Prepare a trial balance for Lavender Company using...Ch. 8 - Identify where each of the following transactions...Ch. 8 - Which of the following transactions will require a...Ch. 8 - Hajun Company received the following bank...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - Leann Company received the following bank...Ch. 8 - Prepare the journal entry required to reconcile...Ch. 8 - A retail store normally has three people working...Ch. 8 - Visit a favorite eatery. Describe some of the...Ch. 8 - A manufacturing plant was finding a huge increase...Ch. 8 - The vice president of finance asks the accounts...Ch. 8 - Even though technology has improved the internal...Ch. 8 - A bank reconciliation takes time and must balance....Ch. 8 - The bank reconciliation revealed that one deposit...
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- There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records? A. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments.arrow_forwardPetty cash is used to ________. A. avoid having to use checks frequently B. make small payments C. avoid having to retain receipts because the amounts are very small D. avoid having to get approvals due to the small amount of cash being paidarrow_forwardWhat internal control or procedure(s) would provide protection against the following threats? Customers are billed for the quantity ordered, but the quantity shipped is actually less because some items have been back ordered. The mailroom clerk steals checks and then endorses them for deposit into the clerk’s personal bank account Goods are shipped to a customer, but that customer is not billed.arrow_forward
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