Question : 167. Match the following elements of internal control: 168. List and define each : 1227217

 

167. Match the following elements of internal control: 

 

168. List and define each of the five elements of internal control. 

169. Two features of internal control are presented in the following sections.  Each is followed by a list of four irregularities that occurred in processing data.  Identify the one irregularity from each list that would be discovered or prevented by the feature of internal control described. 

(a)

The sum of the balances of the accounts in the customers ledger is compared at the end of each month with the balance of the accounts receivable account in the general ledger by a person who has no responsibility for maintaining either the general ledger or the customers ledger.

 

 

 

 

(1)

Five hours of services were rendered but the customer was only billed for four hours.

 

(2)

A cash receipt of $750 was recorded correctly in the accounts receivable controlling account but was posted to the customers ledger as $75.

 

(3)

A bill for services rendered to Cole Co. was erroneously posted to the account of Coleman Co. in the customers ledger.

 

(4)

No entry was made in the accounting records for services rendered to a customer.

 

 

 

(b)

Both cash and credit charges for services rendered are recorded on pre-numbered invoices. At the end of the day, all invoices are accounted for before the duplicate copies of the invoices are routed to the accounting department for entry into the accounts and the cash is sent to the cashier’s department for deposit.

 

 

 

 

(1)

Some charge customers complained that the monthly statements of account did not add all amounts correctly.

 

(2)

Some clerks used incorrect hourly rates in preparing invoices.

 

(3)

Some clerks destroyed duplicate copies of cash invoices and misappropriated the cash.

 

(4)

Some charge customers complained that the monthly statement of account did not indicate credits for payments made.

 

 

 

 

170. The Scharf Company is a retailer located in a state without sales tax.  The following data was given to you to complete the transactions for the day’s sales to be recorded.  All cash drawers start with $100 in change. 

 

 

 

 

 

Cash in Drawer

1,096.54

2,398.76

844.22

1,255.88

Sales Reading

998.75

2,307.76

744.22

1,151.66

Difference

 

 

 

 

 

 

 

 

 

Record the Journal Entries for EACH cash register to determine the cashier’s accuracy. 

Account

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First item for the student to remember is that EACH cash drawer starts with $100.  This must be subtracted from the total cash in drawer to determine the cash over/short amount.