Financial and Managerial Accounting - CengageNow
15th Edition
ISBN: 9781337911979
Author: WARREN
Publisher: CENGAGE L
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Chapter 7, Problem 2E
To determine
Identify whether F’s handling of internal control situations are acceptable or not.
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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…
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…
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 - CengageNow
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
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- 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
- Obj, 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_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 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_forward
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