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.
2. Marker Theater has a computerized order-taking system for its tickets. The system is active all week and backed up every Friday night.
In this case, a violation of applying the principle of technological controls took place.
Technology controls: Technology controls can likewise be known as a procedure or policy that gives a reasonable assurance that the information technology data innovation utilized by an association works as expected, that information is dependable, and that the association is consistent with applicable laws and regulations.
The theater's framework needs to be backed up every day, not just every week. The theater needs to change the backup policy and ensure the backup duplicates are stored away off-premises.
For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.
Bank or Book Side Add or Subtract Adj. Entry or Not
d. Outstanding checks. . . . . . . . . . . . . . .
BTN 6-2 Key comparative figures for Apple and Google follow.
$ millions Current Year Prior Year Current Year Prior Year
Accounts receivable . . . . . . . . . . . . $ 16,849 $ 17,460 $11,556 $ 9,383
Net sales . . . . . . . . . . . . . . . . . . . . . 233,715 182,795 74,989 66,00
Compute days’ sales uncollected (rounded to two decimals) for these companies for each of the two years shown. Comment on any trends for the companies. Which company has the largest percent change (rounded to two decimals) in days’ sales uncollected?
A good system of internal control for cash provides adequate procedures for protecting both cash receipts and cash disbursements. Identify each of the following statements as either true or false regarding this protection.
a. A basic guideline for safeguarding cash is that all cash receipts be deposited weekly or monthly.
Match each document in a voucher system in column one with its description in column two.
1. Purchase requisition
2. Purchase order
4. Receiving report
5. Invoice approval
A. An itemized statement of goods prepared by the vendor listing the customer’s name, items sold, sales prices, and terms of sale.
B. An internal file used to store documents and information to control cash disbursements and to ensure that a transaction is properly authorized and recorded.
C. A document used to place an order with a vendor that authorizes the vendor to ship ordered merchandise at the stated price and terms.
D. A checklist of steps necessary for the approval of an invoice for recording and payment; also known as a check authorization.
E. A document used by department managers to inform the purchasing department to place an order with a vendor.
F. A document used to notify the appropriate persons that ordered goods have arrived, including a description of the quantities and condition of goods.
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