Seminar 04 Problems Chapter 7: P3, P4, P5 Chapter 8: P2, P3 Chapter 7 P3 – Internal Control Activities 1. A. Authorization - Refunds are made only with Hazel’s approval, are recorded on prenumbered credit 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 be accessed by the cashier. C. Documents and Records - When a customer buys a product, the cashier writes up a sales invoice that describes the purchase, including the total price. All sales invoices are prenumbered sequentially. D. Physical Controls - The cash register may be locked with a key. The cashier is the only person other than Hazel who has a key. The cash register must be locked when the cashier is not present. E. Periodic Independent Verification - ll the records are placed in an envelope that is sealed and sent 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 closing transactions. He prepares all credit slips and refunds. All transactions are placed in a sealed envelope for their accountants verification.
