Listed below are five procedures followed by The Beat Company.
1.Several individuals operate the cash register using the same register drawer.
2.Monthly bank reconciliation is prepared by someone who has no other cash responsibilities.
3.Ellen May 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 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. Use the table below.
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Procedure
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IC Good or Weak?
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Related Internal Control Principle
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1
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|
|
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2
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|
|
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3
|
|
|
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4
|
|
|
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5
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|
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A.What are generally accepted accounting principles (GAAP) and what bodies provide authoritative support for GAAP?
B.What elements comprise the FASB's conceptual framework?