ACC400 - Week 2 Solutions

ACC400 - Week 2 Solutions - EXERCISE 7-2 1 Establishment of...

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EXERCISE 7-2 1. Establishment of responsibility. The counter clerk is responsible for handling cash. Other employees are responsible for making the pizzas. 2. Segregation of duties. Employees who make the pizzas do not handle cash. 3. Documentation procedures. The counter clerk uses your order invoice (ticket) in registering the sale on the cash register. The cash register produces a tape of all sales. 4. Physical, mechanical, and electronic controls. A cash register is used to record the sale. 5. Independent internal verification. The counter clerk, in handling the pizza, compares the size of the pizza with the size indicated on the order. 6. Other controls. No visible application possible. Problem Set P7-2B (a) The weaknesses in internal accounting control over collections are: (1) Each usher could take cash from the collection plates en route to the basement office. (2) The head usher counts the cash alone. (3) The head usher’s notation of the count is left in the safe. (4) The financial secretary counts the cash alone. (5) The financial secretary withholds $150 to $200 per week.
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(6) The cash is vulnerable to robbery when kept in the safe overnight. (7)
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ACC400 - Week 2 Solutions - EXERCISE 7-2 1 Establishment of...

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