Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 2E
To determine
Identify whether F’s handling of internal control situations are acceptable or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Internal Controls
Faith Cassen has recently been hired as the manager of Gibraltar Coffee Shop. Gibraltar Coffee Shop is a national chain of franchised coffee shops.During her first month as store ma11age1; Faith encountered the following internal control situations:
a.Faith caught an employee putting a case of 1,000 singleserving tea bags in his car. Not wanting to create a scene, Faith smiled and said, "I don't think you're putting those tea bags on the right shelf. Don't they belong inside the coffee shop?"The employee returned the tea bags to the stockroom.
b.Gibraltar Coffee Shop has one cash register.Prior to Faith'sjoining the coffee shop, each employee working on a shiftwould take a customer order,accept payment,and then prepare the order. Faith made one employee on each shift responsible for taking orders and accepting the customer's Other employees prepare the orders.
c.Because only one employee uses the cash register,that employee is responsible for counting the cash…
Internal Controls
Faith Cassen has recently been hired as the manager of Gibraltar Coffee Shop. Gibraltar Coffee Shop is a national chain of franchised coffee shops. During her first month as store manager, Faith encountered the following internal control situations:
a. Faith caught an employee putting a case of 1,000 single-serving tea bags in his car. Not wanting to create a scene, Faith smiled and said, "I don’t think you’re putting those tea bags on the right shelf. Don't they belong inside the coffee shop?" The employee returned the tea bags to the stockroom.
I with Faith's method of handling this situation because she has the internal control principle of safeguarding of assets.
b. Gibraltar Coffee Shop has one cash register. Prior to Faith’s joining the coffee shop, each employee working on a shift would take a customer order, accept payment, and then prepare the order. Faith made one employee on each shift responsible for taking orders and accepting the customer’s…
Jimmy 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…
Chapter 7 Solutions
Financial And Managerial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Why should the employee who handles cash receipts...Ch. 7 - Prob. 3DQCh. 7 - Why should the responsibility for maintaining the...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 1BECh. 7 - Prob. 2BECh. 7 - Prob. 3BECh. 7 - Prob. 4BECh. 7 - Prob. 5BECh. 7 - Sarbanes-Oxley internal control report Using...Ch. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 24ECh. 7 - Prob. 1PACh. 7 - Prob. 2PACh. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - Prob. 5PACh. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - Prob. 5PBCh. 7 - Analyze and compare Amazon.com to Netflix...Ch. 7 - Analyze and compare J. C. Penney and Macys J. C....Ch. 7 - Prob. 3MADCh. 7 - Prob. 4MADCh. 7 - Analyze and compare Nike, lululemon, and Under...Ch. 7 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 7 - Bank error During the preparation of the bank...Ch. 7 - Prob. 4TIFCh. 7 - Prob. 5TIF
Knowledge Booster
Similar questions
- Jimmy 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 her…arrow_forwardimmy 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 her car.…arrow_forwardPlease read the following and identify any internal control principles that may be violated in the Jane Hardware store.(identify what could go wrong and what controls Jane Hardware should put in place to prevent it) Jerry Finch has worked for Jane Hardware for many years, Jerry has been a model employee. He has not taken a vacation in over three years, always stating that work was too important. One of Jerry's primary jobs at the store is to open mail and list the checks received. He also collects cash from customers at the store's outdoor nursery area. There are times that things are so hectic that Jerry does not bother to use the register, simply making change from cash he carries with him. When things slow down at the store Jerry often offers to help Cindy(the Accounting Clerk) post payments to the customer's accounts receivable ledger. Cindy is always happy to receive help since she is also quite busy and because Jerry is such a careful worker.arrow_forward
- 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? Jean:Neal and Linda were both arrested this morning. Sara:What?Arrested?YOu're putting me on! Jean:NO,really!The polic arrested them first thing this morning.Put then in handcuffs,read then rights-the whole works.It was unreal! Sara: what did they do? Jean:Well,apparently they were filling out merchandies refund forms for fiction customers and then taking the cash. 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…arrow_forwardObj, 2, 3 Faith Cassen has recently been hired as the manager of Gibraltar Coffee Shop. Gibraltar Coffee Shop is a national chain of franchised coffee shops. During her first month as store manager, Faith encountered the following internal control situations: a. Faith caught an employee putting a case of 1,000 single-serving tea bags in his car. Not wanting to create a scene, Faith smiled and said, "I don't think you're putting those tea bags on the right shelf. Don't they belong inside the coffee shop?" The employee returned the tea bags to the stockroom. b. Gibraltar Coffee Shop has one cash register. Prior to Faith's joining the coffee shop, each employee working on a shift would take a customer order, accept paymert, and then prepare the order. Faith made one employee on each shift responsible for taking orders and accepting the customer's payment. Other employees prepare the orders. c. Because only one employee uses the cash register, that employee is responsible for counting the…arrow_forwardListed 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…arrow_forward
- 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 Human Resource ControlsIndependent Internal VerificationEstablishment of ResponsibilityPhysical ControlsSegregation of DutiesDocumentation Procedures 2. Any member of the sales department can approve credit sales. Select a weakness in internal control WeakGood Select a control principle that is violated Segregation of DutiesDocumentation ProceduresEstablishment…arrow_forwardFollowing are five separate cases involving internal control issues. a. Tywin Company keeps very poor records of its equipment. Instead, the company asserts its employees are honest and would never steal from the company. b. Marker Theater has a computerized order-taking system for its tickets. The system is backed up once a year. c. Sutton Company has two employees handling acquisitions of inventory. One employee places purchase orders and pays vendors. The second employee receives the merchandise. d. The owner of Super Pharmacy uses a check software/printer to prepare checks, making it difficult for anyone to alter the amount of a check. The check software/printer, which is not password protected, is on the owner’s desk in an office that contains company checks and is normally unlocked. e. To ensure the company retreat would not be cut, the manager of Lavina Company decided to save money by canceling the external audit of internal controls. Required 1. For each case, identify the…arrow_forwardFollowing are five separate cases involving internal control issues. Required: 1. For each case, identify the principle(s) of internal control that is violated. a. Chi Han receives all incoming customer cash receipts for her employer and posts the customer payments to their respective accounts. b. Sutton Company has two employees handling acquisitions of inventory. One employee places purchase orders and pays vendors. The second employee receives the merchandise. c. Ben Shales prides himself on hiring quality workers who require little supervision. As office manager, Ben gives his employees full discretion over their tasks and for years has seen no reason to perform independent reviews of their work. d. At Tico Company, Julia and Trevor alternate lunch hours. Julia is the petty cash custodian, but if someone needs petty cash when she is at lunch, Trevor fills in as custodian. e. Nori Nozumi posts all patient charges and payments at the Hopeville Medical Clinic. Each night Nori backs up…arrow_forward
- Lenter Supply Company is a medium-sized distributor of wholesale hardware supplies in the central Ohio area. It has been a client of yours for several years and has instituted excellent internal controls for sales at your recommendation. In providing control over shipments, the client has prenumbered “warehouse removal slips” that are used for every sale. It is company policy never to remove goods from the warehouse without an authorized warehouse removal slip. After shipment, two copies of the warehouse removal slip are sent to billing for the computerized preparation of a sales invoice. One copy is stapled to the duplicate copy of a prenumbered sales invoice, and the other copy is filed numerically. In some cases, more than one warehouse removal slip is used for billing one sales invoice. The smallest warehouse removal slip number for the year is 11741 and the largest is 34687. The smallest sales invoice number is 45302 and the largest is 65747. In the audit of sales, one of the…arrow_forwardFollowing are five separate cases involving internal control issues. Required: 1. For each case, identify the principle(s) of internal control that is violated. a. Marker Theater has a computerized order-taking system for its tickets. The system is backed up once a year. b. Sutton Company has two employees handling acquisitions of inventory. One employee places purchase orders and pays vendors. The second employee receives the merchandise. C. To ensure the company retreat would not be cut, the manager of Lavina Company decided to save money by canceling the external audit of internal controls. d. Tywin company keeps very poor records of its equipment. Instead, the company asserts its employees are honest and would never steal from the company. The owner of Super Pharmacy uses a check software/printer to prepare checks, making it difficult for e. anyone to alter the amount of a check. The check software/printer, which is not password protected, is on the owner's desk in an office that…arrow_forwardLenter Supply Company is a medium-sized distributor of wholesale hardware supplies in the central Ohio area. It has been a client of yours for several years and has instituted excellent internal controls for sales at your recommendation. In providing control over shipments, the client has prenumbered “warehouse removal slips” that are used for every sale. It is company policy never to remove goods from the warehouse without an authorized warehouse removal slip. After shipment, two copies of the warehouse removal slip are sent to billing for the computerized preparation of a sales invoice. One copy is stapled to the duplicate copy of a prenumbered sales invoice, and the other copy is filed numerically. In some cases, more than one warehouse removal slip is used for billing one sales invoice. The smallest warehouse removal slip number for the year is 11741 and the largest is 34687. The smallest sales invoice number is 45302 and the largest is 65747. In the audit of sales, one of the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Business Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning