Following is a list of eight generic control goals (A-H), followed by eight descriptions of either process failures (i.e., control goals not met) or instances of successful control plans (i.e., plans that helped to achieve controls goals). List the numbers 1 through 8 in the table below. Each number represents one of the described situations on the page below. In the table, next to each number, place the capital letter of the control goal that best matches the situation described. Hint: Some letters may be used more than once in each situation. Conversely, some letters may not be used at all. Control goals: Ensure effectiveness of operations Ensure efficient employment of resources Ensure security of resources Ensure input validity Ensure input completeness Ensure input accuracy Ensure update completeness Ensure update accuracy Situations: Instead of preparing deposit slips by hand, Kaley Company has them generated by the computer. The company does so to speed up the deposit of cash (speedy deposit being an objective at Kaley). In a typical cash receipt process, one of the earliest processes is to endorse each customer’s check with the legend, for example, “for deposit only to Cost and Effect Company.” Levers Corporation recorded as sales some shipments of disk drives between their warehouses. These disks drives had not been ordered by anyone and were still the property of Levers. Diffusion Co. prepares customer sales order on a multipart form, one copy of which is sent to its building department, where it is placed in a temporary file pending shipping notification. Each morning, a billing clerk reviews the file of open sales orders and investigates with the shipping department any missing shipping notices for orders entered 48 hours (or more) earlier. An accounts payable clerk at C&C Company enters vendor invoices into the computer. When the invoices for the particular day were entered, the computer noted that vendor invoice 12345 appeared twice. The computer rejected the second entry (i.e., the duplicate, the invoice with the same number). In entering the invoices mentioned in situation 5, the data for the payment terms was missing from invoice 12349 and therefore was not keyed into the computer. Referring to situation 4, once a shipping notice is received in the billing department, the first step in preparing the invoice to send to the customer is to compare the unit prices shown on the sales order with a standard price list kept in the billing department. At Falcon Company, the accounts receivable master data are updated at the end of each day from payment data contained on the cash receipts event data store. At the completion of the update run, the difference between total dollar value of accounts receivable before and after the update run is compared to the total dollars of payments being processed.

Following is a list of eight generic control goals (A-H), followed by eight descriptions of either process failures (i.e., control goals not met) or instances of successful control plans (i.e., plans that helped to achieve controls goals). List the numbers 1 through 8 in the table below. Each number represents one of the described situations on the page below. In the table, next to each number, place the capital letter of the control goal that best matches the situation described. Hint: Some letters may be used more than once in each situation. Conversely, some letters may not be used at all. Control goals: Ensure effectiveness of operations Ensure efficient employment of resources Ensure security of resources Ensure input validity Ensure input completeness Ensure input accuracy Ensure update completeness Ensure update accuracy Situations: Instead of preparing deposit slips by hand, Kaley Company has them generated by the computer. The company does so to speed up the deposit of cash (speedy deposit being an objective at Kaley). In a typical cash receipt process, one of the earliest processes is to endorse each customer’s check with the legend, for example, “for deposit only to Cost and Effect Company.” Levers Corporation recorded as sales some shipments of disk drives between their warehouses. These disks drives had not been ordered by anyone and were still the property of Levers. Diffusion Co. prepares customer sales order on a multipart form, one copy of which is sent to its building department, where it is placed in a temporary file pending shipping notification. Each morning, a billing clerk reviews the file of open sales orders and investigates with the shipping department any missing shipping notices for orders entered 48 hours (or more) earlier. An accounts payable clerk at C&C Company enters vendor invoices into the computer. When the invoices for the particular day were entered, the computer noted that vendor invoice 12345 appeared twice. The computer rejected the second entry (i.e., the duplicate, the invoice with the same number). In entering the invoices mentioned in situation 5, the data for the payment terms was missing from invoice 12349 and therefore was not keyed into the computer. Referring to situation 4, once a shipping notice is received in the billing department, the first step in preparing the invoice to send to the customer is to compare the unit prices shown on the sales order with a standard price list kept in the billing department. At Falcon Company, the accounts receivable master data are updated at the end of each day from payment data contained on the cash receipts event data store. At the completion of the update run, the difference between total dollar value of accounts receivable before and after the update run is compared to the total dollars of payments being processed.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

List the numbers 1 through 8 in the table below. Each number represents one of the described situations on the page below. In the table, next to each number, place the capital letter of the control goal that best matches the situation described.

Hint: Some letters may be used more than once in each situation. Conversely, some letters may not be used at all.

Control goals:

Ensure effectiveness of operations
Ensure efficient employment of resources
Ensure security of resources
Ensure input validity
Ensure input completeness
Ensure input accuracy
Ensure update completeness
Ensure update accuracy

Situations:

Instead of preparing deposit slips by hand, Kaley Company has them generated by the computer. The company does so to speed up the deposit of cash (speedy deposit being an objective at Kaley).
In a typical cash receipt process, one of the earliest processes is to endorse each customer’s check with the legend, for example, “for deposit only to Cost and Effect Company.”
Levers Corporation recorded as sales some shipments of disk drives between their warehouses. These disks drives had not been ordered by anyone and were still the property of Levers.
Diffusion Co. prepares customer sales order on a multipart form, one copy of which is sent to its building department, where it is placed in a temporary file pending shipping notification. Each morning, a billing clerk reviews the file of open sales orders and investigates with the shipping department any missing shipping notices for orders entered 48 hours (or more) earlier.
An accounts payable clerk at C&C Company enters vendor invoices into the computer. When the invoices for the particular day were entered, the computer noted that vendor invoice 12345 appeared twice. The computer rejected the second entry (i.e., the duplicate, the invoice with the same number).
In entering the invoices mentioned in situation 5, the data for the payment terms was missing from invoice 12349 and therefore was not keyed into the computer.
Referring to situation 4, once a shipping notice is received in the billing department, the first step in preparing the invoice to send to the customer is to compare the unit prices shown on the sales order with a standard price list kept in the billing department.
At Falcon Company, the accounts receivable master data are updated at the end of each day from payment data contained on the cash receipts event data store. At the completion of the update run, the difference between total dollar value of accounts receivable before and after the update run is compared to the total dollars of payments being processed.

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