Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 4, Problem 3E
To determine
Write a memo to Person S outlining the procedures which he should implement to ensure that his store assets are protected and that the financial transactions are properly recorded.
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Internal controls
The following is an excerot from a conversation between two salesclerks,Jean Moen and Sara Cheney.Jean and Sara are employed by Turpin Meadows Electronics, a locally owned and operated electronics retail store.
Jean:Did you hear the news?
Sara: What news?
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Sara:What?Arrested?YOu're putting me on!
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Sara: what did they do?
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SAra: I guess i never thought of that.How did they catch them?
Jean: The store manager noticed that returns were twicw that of the last year and seemed to be increasing.Whan he confronted Neal<he became fkustered and admitted to taking the cash,apparently more than $9,000 in just three months.They're going over the transactions of the last six months…
Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control
violated or followed for each procedure.
1. The owner does not use ID scanners to limit access to expensive merchandise. Instead, the owner argues they hire honest
employees.
2. Several salesclerks share the same cash drawer.
3. The company devotes resources towards keeping accurate accounting records for machinery.
4. The company does not allow employees with access to cash to modify accounting records.
5. Employees that handle easily transferable assets such as cash are bonded.
Weakness or Strength
1. Weakness
2. Weakness
3. Strength
4. Strength
5. Strength
Internal Control Principle
Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control
violated or followed for each procedure.
1. The owner does not use ID scanners to limit access to expensive merchandise. Instead, the owner argues they hire honest
employees.
2. Several salesclerks share the same cash drawer.
3. The company devotes resources towards keeping accurate accounting records for machinery.
4. The company does not allow employees with access to cash to modify accounting records.
5. Employees that handle easily transferable assets such as cash are bonded.
Weakness or Strength
1. Weakness
2. Weakness
3. Strength
4. Strength
5. Strength
Internal Control Principle
Apply technological controls
Establish responsibilities
Maintain adequate records
Separate recordkeeping from custody of assets
Insure assets and bond key employees
Chapter 4 Solutions
Survey Of Accounting
Ch. 4 - Prob. 1QCh. 4 - Prob. 2QCh. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 4 - Prob. 5QCh. 4 - Prob. 6QCh. 4 - What is meant by separation of duties? Give an...Ch. 4 - 9. What are the attributes of a high-quality...Ch. 4 - 10. What is a fidelity bond? Explain its purpose.Ch. 4 - Prob. 10Q
Ch. 4 - Prob. 11QCh. 4 - Prob. 12QCh. 4 - Prob. 13QCh. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - Prob. 16QCh. 4 - Prob. 17QCh. 4 - Prob. 18QCh. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 21QCh. 4 - Prob. 22QCh. 4 - Prob. 23QCh. 4 - Prob. 24QCh. 4 - Prob. 25QCh. 4 - Prob. 26QCh. 4 - Prob. 27QCh. 4 - Prob. 28QCh. 4 - Prob. 29QCh. 4 - Prob. 30QCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Prob. 19PCh. 4 - Prob. 20PCh. 4 - Prob. 21PCh. 4 - Prob. 22PCh. 4 - Fraud triangle Sam Sharp is an accountant with a...Ch. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 1ATCCh. 4 - Prob. 3ATCCh. 4 - Prob. 4ATCCh. 4 - ATC 6-7 Ethical Dilemma I need just a little extra...
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