Internal control : Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the internal control principles: Authorizing the responsibility Segregation of duties Documenting and recording transactions Physical controls Periodic independent verification Human resource controls To indicate : (1) Whether procedures of internal control over cash represents strength. (2) Whether procedures of internal control over cash represents weakness.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 7.1BPR

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the internal control principles:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To indicate:

(1) Whether procedures of internal control over cash represents strength.

(2) Whether procedures of internal control over cash represents weakness.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Match each of the following cash receipt activities to the internal control principle to which it bestrelates. Enter the appropriate letter in the space provided.1. A list of checks received in the mail is prepared.2. Total cash receipts are compared to the amounton the bank deposit slip.3. A password is required to open the cash register.4. Price changes at the checkout require a manager’sapproval.5. Cashiers are required to count the cash in theirregister at the beginning and end of each shift.A. Establish responsibilityB. Segregate dutiesC. Restrict accessD. Document proceduresE. Independently verify

Internal Control of Cash Receipts The procedures used for over-the-counter receipts are as follows. At the close of each day's business, the sales clerks count the cash in their respective cash drawers, after which they determine the amount recorded by the cash register and prepare the memo cash form, noting any discrepancies. An employee from the cashier's office counts the cash, compares the total with the memo, and takes the cash to the cashier's office. a. Identify the weak link in internal control. An employee from the cashier's office counts the cash and compares the total with the memorandum. An employee from the cashier's office takes the cash to the cashier's office. An employee from the treasurer's office takes the cash to the cashier's office. The sales clerks should have access to the cash register tapes. The sales clerks should not have access to the cash register tapes. b. Who should remove the cash register tapes from the register? A teller from the bank An…

Which of the following is not an appropriate internal control for cash receipts over the counter? A. The cash drawer opens after the store clerk enters a transaction. B. The store clerk deposits the cash in the bank. C. At the end of the day, the manager proves the cash by comparing the cash in the drawer against the machine's record of cash sales. D. A receipt is issued for each transaction to ensure that each sale is recorded.