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• 2. All over-the-counter receipts are processed by three clerks who use a cash register with a single cash drawer. • 3. The company accountant makes the bank deposit and then records the day's receipts. • 4. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total. • 5. Cashiers are experienced; they are not bonded. Instructions a. For each procedure, explain the weakness in internal control, and identify the control principle that is violated. b. For each weakness, suggest a change in procedure that will result in good internal control.

• 2. All over-the-counter receipts are processed by three clerks who use a cash register with a single cash drawer. • 3. The company accountant makes the bank deposit and then records the day's receipts. • 4. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total. • 5. Cashiers are experienced; they are not bonded. Instructions a. For each procedure, explain the weakness in internal control, and identify the control principle that is violated. b. For each weakness, suggest a change in procedure that will result in good internal control.

Pkg Acc Infor Systems MS VISIO CD
Pkg Acc Infor Systems MS VISIO CD
10th Edition
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:Ulric J. Gelinas
Chapter11: The Billing/accounts Receivable/cash receipts (b/ar/cr) Process
Section: Chapter Questions
Problem 2SP
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E8.2 E8.2 (LO 1, 2) The following control procedures are used at Torres Company for over-the-counter cash receipts. Identify internal control weaknesses over cash receipts and suggest improvements. • 1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked briefcase in the stock room until it is deposited in the bank. • 2. All over-the-counter receipts are processed by three clerks who use a cash register with a single cash drawer. • 3. The company accountant makes the bank deposit and then records the day's receipts. • 4. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total. • 5. Cashiers are experienced; they are not bonded. Instructions a. For each procedure, explain the weakness in internal control, and identify the control principle that is violated. b. For each weakness, suggest a change in procedure that will result in good internal control.
Transcribed Image Text:E8.2 E8.2 (LO 1, 2) The following control procedures are used at Torres Company for over-the-counter cash receipts. Identify internal control weaknesses over cash receipts and suggest improvements. • 1. To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked briefcase in the stock room until it is deposited in the bank. • 2. All over-the-counter receipts are processed by three clerks who use a cash register with a single cash drawer. • 3. The company accountant makes the bank deposit and then records the day's receipts. • 4. At the end of each day, the total receipts are counted by the cashier on duty and reconciled to the cash register total. • 5. Cashiers are experienced; they are not bonded. Instructions a. For each procedure, explain the weakness in internal control, and identify the control principle that is violated. b. For each weakness, suggest a change in procedure that will result in good internal control.
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