Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

1PSB_5

Expert-verified
Financial & Managerial Accounting
Found in: Page 312
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control.

5. Lavina Company is a small business that has separated the duties of cash receipts and cash disbursements. The employee responsible for cash disbursements reconciles the bank account monthly.

Answer

This case violates the principle of segregation of duties.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Introduction to topic

Principle of internal control: The internal control principles are the ideas that expect the executives to set up techniques to guarantee organization resources are shielded. All in all, these are the principles management uses to lay out the ways of safeguarding organization assets.

Step 2: Recommend ensuring adherence to principles of internal control

It is great internal control to isolate cash receipts and distribution duties. In addition, an employee independent of these two functions ought to be responsible for accommodating the bank account month to month. On the off chance that no workers are accessible, this is an acceptable duty for the owner as it takes into account owner oversight, which is great internal control.

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.