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At the end of the day, the total receipts are counted by the cashier on
duty
and reconciled to the cash register total
Set 4
Question 14. Question : (TCO D) Your friend Dean has hired you to
evaluate the following internal control procedures.
a: Explain to your friend whether each of the numbered items below is
an internal control strength or weakness. You must also state which
principle relates to each of the internal controls.
b: For the weaknesses, you also need to state a recommendation for
improvement.
1: Bonding of the cashiers is not required because all of the cashiers
have significant experience.
2: The treasurer is the only one allowed to sign checks.
3: All employees may operate cash registers.
4: Blank checks are stored in the safe.
5: Supervisors count cash receipts daily.
12. (TCOs E and F) Please prepare the following journal entries.
Indicate which account should be debited and which account should be
credited, along w ith the dollar amount of the debit and credit.
(1) Investors invest $500,000 in exchange for 50,000 shares of common
stock.
(2) Company purchased equipment for $25,000 on account.
(3) Company paid Rent for $4,000.
(4) Company received $15,000 for services not yet performed.
(5) Employees work Monday through Friday and are paid on Friday.
Salary expense is $10,000 per day and this year, December 31 falls on a
Wednesday. (Points : 30)