Listed below are five procedures followed by Gilmore Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Employees are required to take vacations. Select a weakness in internal control GoodWeak Select a control principle that is violated Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation Procedures 2. Any member of the sales department can approve credit sales. Select a weakness in internal control GoodWeak Select a control principle that is violated Physical ControlsIndependent Internal VerificationDocumentation ProceduresHuman Resource ControlsEstablishment of ResponsibilitySegregation of Duties 3. Paul Jaggard ships goods to customers, bills customers, and receives payment from customers. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation ProceduresIndependent Internal Verification 4. Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities. Select a weakness in internal control GoodWeak Select a control principle that is violated Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures 5. Time clocks are used for recording time worked by employees. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesHuman Resource ControlsEstablishment of ResponsibilityPhysical ControlsIndependent Internal VerificationDocumentation Procedures

Listed below are five procedures followed by Gilmore Company. Indicate whether each procedure is an example of good internal control or of weak internal control. If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated. Use the table below. Procedure IC Good or Weak? Related Internal Control Principle 1. Employees are required to take vacations. Select a weakness in internal control GoodWeak Select a control principle that is violated Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation Procedures 2. Any member of the sales department can approve credit sales. Select a weakness in internal control GoodWeak Select a control principle that is violated Physical ControlsIndependent Internal VerificationDocumentation ProceduresHuman Resource ControlsEstablishment of ResponsibilitySegregation of Duties 3. Paul Jaggard ships goods to customers, bills customers, and receives payment from customers. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation ProceduresIndependent Internal Verification 4. Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities. Select a weakness in internal control GoodWeak Select a control principle that is violated Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures 5. Time clocks are used for recording time worked by employees. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesHuman Resource ControlsEstablishment of ResponsibilityPhysical ControlsIndependent Internal VerificationDocumentation Procedures

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 3MC: What is the best way for owners of small businesses to maintain proper internal controls? A. The...

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Procedure	IC Good or Weak?	Related Internal Control Principle
1.	Employees are required to take vacations.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Independent Internal VerificationSegregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation Procedures
2.	Any member of the sales department can approve credit sales.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Physical ControlsIndependent Internal VerificationDocumentation ProceduresHuman Resource ControlsEstablishment of ResponsibilitySegregation of Duties
3.	Paul Jaggard ships goods to customers, bills customers, and receives payment from customers.	Select a weakness in internal control WeakGood	Select a control principle that is violated Segregation of DutiesEstablishment of ResponsibilityPhysical ControlsHuman Resource ControlsDocumentation ProceduresIndependent Internal Verification
4.	Total cash receipts are compared to bank deposits daily by someone who has no other cash responsibilities.	Select a weakness in internal control GoodWeak	Select a control principle that is violated Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures
5.	Time clocks are used for recording time worked by employees.	Select a weakness in internal control WeakGood	Select a control principle that is violated Segregation of DutiesHuman Resource ControlsEstablishment of ResponsibilityPhysical ControlsIndependent Internal VerificationDocumentation Procedures

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