Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 4, Problem 4.24BE
To determine
To identify: The internal control weaknesses in the given situation, state the losses to Company H due to the weaknesses, and recommend to control weakness
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Below are several scenarios related to control activities of a company.1. A manufacturing company compares total sales in the current year to those in the previous year but does not compare the cost of production.2. So that employees can have easy access to office supplies, a company keeps supplies in unlocked cabinets in multiple locations.3. At the end of each day, a single employee collects all cash received from customers, records the total, and makes the deposit at the bank.4. At the end of the year only, the company compares its cash records to the bank’s records of cash deposited and withdrawn during the year.5. A company encourages employees to call an anonymous hotline if they believe other employees are circumventing internal control features.6. All employees have the authority to refund a customer’s money.Required:For each scenario, determine which control activity is violated. Control activities include separation of duties, physical controls, proper authorization, employee…
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ABC Limited is a manufacturing firm with a workforce of more than 100 employees. Mr Peter has
recently joined the firm as the account payable clerk. Miss Emma is the accounting department
head, and she is concerned about the cash disbursement system. Therefore, she has asked Mr
Peter to analyse the firm's cash disbursement system and identify the internal control weaknesses
from the system. Following is the description of the cash disbursement system.
In the temporary file, the account payable clerk receives the supplier's invoice and reconciles it
with the purchase order. The accounts payable clerk records the purchase in the purchases journal
from the clerk's computer terminal and records the liability by adding a record to accounts
payable subsidiary ledger. The clerk then updates the inventory control and accounts payable
control accounts in the general ledger. The purchases order and invoice are later filed in the
department.
Each day, the clerk visually…
Chapter 4 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 4 - Prob. 1QCCh. 4 - Prob. 2QCCh. 4 - Prob. 3QCCh. 4 - Prob. 4QCCh. 4 - Prob. 5QCCh. 4 - Prob. 6QCCh. 4 - Prob. 7QCCh. 4 - Why does cash require some specific internal...Ch. 4 - Prob. 9QCCh. 4 - Prob. 10QC
Ch. 4 - Prob. 11QCCh. 4 - Prob. 12QCCh. 4 - Prob. 4.1ECCh. 4 - Prob. 4.1SCh. 4 - Prob. 4.2SCh. 4 - (Learning Objective 2: Describe objectives and...Ch. 4 - Prob. 4.4SCh. 4 - (Learning Objective 2: Explain the objectives and...Ch. 4 - (Learning Objective 3: Evalue internal controls...Ch. 4 - Prob. 4.7SCh. 4 - Prob. 4.8SCh. 4 - Prob. 4.9SCh. 4 - Prob. 4.10SCh. 4 - Prob. 4.11SCh. 4 - Prob. 4.12SCh. 4 - Prob. 4.13SCh. 4 - Prob. 4.14SCh. 4 - Prob. 4.15AECh. 4 - Prob. 4.16AECh. 4 - Prob. 4.17AECh. 4 - Prob. 4.18AECh. 4 - Prob. 4.19AECh. 4 - Prob. 4.20AECh. 4 - Prob. 4.21AECh. 4 - Prob. 4.22BECh. 4 - Prob. 4.23BECh. 4 - Prob. 4.24BECh. 4 - (Learning Objectives 1, 2, 3: Describe fraud and...Ch. 4 - Prob. 4.26BECh. 4 - Prob. 4.27BECh. 4 - Prob. 4.28BECh. 4 - Prob. 4.29QCh. 4 - Prob. 4.30QCh. 4 - Prob. 4.31QCh. 4 - Prob. 4.32QCh. 4 - Prob. 4.33QCh. 4 - Prob. 4.34QCh. 4 - Prob. 4.35QCh. 4 - Prob. 4.36QCh. 4 - Prob. 4.37QCh. 4 - Prob. 4.38QCh. 4 - Prob. 4.39QCh. 4 - Prob. 4.40QCh. 4 - Prob. 4.41APCh. 4 - Prob. 4.42APCh. 4 - Prob. 4.43APCh. 4 - Prob. 4.44APCh. 4 - Prob. 4.45BPCh. 4 - (Learning Objectives 2, 3: Explain the objectives...Ch. 4 - (Learning Objective 3: Evaluate internal controls)...Ch. 4 - Prob. 4.48BPCh. 4 - Prob. 4.49CEPCh. 4 - Prob. 4.50CEPCh. 4 - Prob. 4.51SCCh. 4 - Prob. 4.52DCCh. 4 - Prob. 4.53DCCh. 4 - Prob. 4.54EICCh. 4 - Prob. 1FFCh. 4 - Prob. 1FA
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- ABC Limited is a manufacturing firm with a workforce of more than 100 employees. Mr Peter has recently joined the firm as the account payable clerk. Miss Emma is the accounting department head, and she is concerned about the cash disbursement system. Therefore, she has asked Mr Peter to analyse the firm's cash disbursement system and identify the internal control weaknesses from the system. Following is the description of the cash disbursement system.In the temporary file, the account payable clerk receives the supplier's invoice and reconciles it with the purchase order. The accounts payable clerk records the purchase in the purchases journal from the clerk's computer terminal and records the liability by adding a record to accounts payable subsidiary ledger. The clerk then updates the inventory control and accounts payable control accounts in the general ledger. The purchases order and invoice are later filed in the department.Each day, the clerk visually searches the accounts…arrow_forwardQuestion ABC Limited is a manufacturing firm with a workforce of more than 100 employees. Mr Peter has recently joined the firm as the account payable clerk. Miss Emma is the accounting department head, and she is concerned about the cash disbursement system. Therefore, she has asked Mr Peter to analyse the firm's cash disbursement system and identify the internal control weaknesses from the system. Following is the description of the cash disbursement system. In the temporary file, the account payable clerk receives the supplier's invoice and reconciles it with the purchase order. The accounts payable clerk records the purchase in the purchases journal from the clerk's computer terminal and records the liability by adding a record to accounts payable subsidiary ledger. The clerk then updates the inventory control and accounts payable control accounts in the general ledger. The purchases order and invoice are later filed in the department. Each day, the clerk visually searches the…arrow_forwardJimmy Pace has recently been hired as the manager of Jittery Jon’s Coffee Shop. Jittery Jon’s Coffee Shop is a national chain of franchised coffee shops. During his first month as store manager, Jimmy encountered the following internal control situations: a. Jittery Jon’s Coffee Shop has one cash register. Prior to Jimmy’s joining the coffee shop, each employee working on a shift would take a customer order, accept payment, and then prepare the order. Jimmy made one employee on each shift responsible for taking orders and accepting the customer’s payment. Other employees prepare the orders. b. Because only one employee uses the cash register, that employee is responsible for counting the cash at the end of the shift and verifying that the cash in the drawer matches the amount of cash sales recorded by the cash register. Jimmy expects each cashier to balance the drawer to the penny every time—no exceptions. c. Jimmy caught an employee putting a case of 1,000 single-serving tea bags in…arrow_forward
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