
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Imurlal LUnTUI amu give an example of each principle that
you might observe when picking up your pizza. (Note: It may not be possible to observe
all the principles.)
E7-3 The following control procedures are used in Keaton Company for over-the-counter
cash receipts.
List
oVE
im
1. Each store manager is responeible for interviewing applicants for cashier jobs. They
are hired if they seem honest and trastworthy.
2. All over-the-counter receipts are regisiered by three clerks who share a cash register
with a single cash drawer.
3. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked brief-
case in the stock room until it is deposited in the bank.
4. At the end of each day, the total receipts are counted by the cashier on duty and rec-
onciled to the cash register total.
5. The company accountant makes the bank deposit and then records the day's receipts.
(L

Transcribed Image Text:aud, Internal Control, and Cash
Instructions
(a) For each procedure, explain the weakness in internal control and identify the control
principle that is violated.
(b) For each weakness, suggest a change in the procedure that will result in good internal
control.
Expert Solution
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