Sample content
EXERCISE 7-5
Procedure
IC good or weak?
Related internal control principle
1.
Weak
Establishment of Responsibility
2.
Good
Independent Internal Verification
3.
Weak
Segregation of Duties
4.
Good
Segregation of Duties
5.
Weak
Documentation Procedures
Exercise 7-5
Your answer is correct.
Listed below are five procedures followed by Parson Company.
1.
Several individuals operate the cash register using the same register drawer.
2.
A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.
3.
Fran Vorbeck writes checks and also records cash payment journal entries.
4.
One individual orders inventory, while a different individual authorizes payments.
5.
Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording.
Indicate whether each procedure is an example of good internal control or of weak internal control. If it is
1. ACC 557 Week 5 Chapter 7 (E7 5 E7 7 E7 14 P7 3A)
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Sample content
EXERCISE 7-5
Procedure
IC good or weak?
2. Related internal control principle
1.
Weak
Establishment of Responsibility
2.
Good
Independent Internal Verification
3.
Weak
Segregation of Duties
4.
Good
Segregation of Duties
5.
Weak
Documentation Procedures
Exercise 7-5
Your answer is correct.
Listed below are five procedures followed by Parson Company.
3. 1.
Several individuals operate the cash register using the same register drawer.
2.
A monthly bank reconciliation is prepared by someone who has no other cash
responsibilities.
3.
Fran Vorbeck writes checks and also records cash payment journal entries.
4.
One individual orders inventory, while a different individual authorizes payments.
5.
Unnumbered sales invoices from credit sales are forwarded to the accounting
department every four weeks for recording.
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.
Procedure
IC good or weak?
Related internal control principle
1.
Weak
Establishment of Responsibility
2.
4. Good
Independent Internal Verification
3.
Weak
Segregation of Duties
4.
Good
Segregation of Duties
5.
Weak
Documentation Procedures
EXERCISE 7-7
May 1 Petty Cash 100.00
Cash 100.00
June 1 Delivery Expense 31.25
Postage Expense 41.00
Miscellaneous Expense 25.00
Cash Over and Short 1.00
Cash 98.25
5. July 1 Delivery Expense 21.00
Entertainment Expense 51.00
Miscellaneous Expense 24.75
Cash 96.75
July 10 Petty Cash 50.00
Cash 50.00
Print by: DAOUD ADAM
ACC557029VA016-1128-001 / HW Ch07
*Exercise 7-7
Your answer is correct.
LaSalle Company established a petty cash fund on May 1, cashing a check for
$100. The company reimbursed the fund on June 1 and July 1 with the following
results.
June 1: Cash in fund $1.75.
Receipts: delivery expense $31.25; postage expense $41; and miscellaneous
expense $25.
July 1: Cash in fund $3.25.
Receipts: delivery expense $21; entertainment expense $51; and miscellaneous
expense $24.75.
On July 10, LaSalle increased the fund from $100 to $150.00.
Prepare journal entries for LaSalle Company. (Credit account titles are
automatically indented whe
