Seminar 04 ProblemsChapter 7: P3, P4, P5Chapter 8: P2, P3Chapter 7 P3 – Internal Control Activities1.A. Authorization - Refunds are made only with Hazel’s approval, are recorded on prenumberedcredit memorandum forms, and are rung up on the cash register.B. Recording Transactions - The sale is recorded on a tape inside the cash register that cannot beaccessed by the cashier.C. Documents and Records - When a customer buys a product, the cashier writes up a salesinvoice that describes the purchase, including the total price. All sales invoices are prenumberedsequentially.D. Physical Controls - The cash register may be locked with a key. The cashier is the only personother than Hazel who has a key. The cash register must be locked when the cashier is notpresent.E. Periodic Independent Verification - ll the records are placed in an envelope that is sealed andsent to the company’s accountant for verification and recording in the company records.F. Separation of Duties – Cashiers ring the sales, but Hazel has final say in the closingtransactions. He prepares all credit slips and refunds. All transactions are placed in a sealedenvelope for their accountants verification.
