Listed below are the five procedures followed by the Eikenberry Company. Several

Question

Listed below are the five procedures followed by the Eikenberry Company. Several individuals operate the cash register using the small register drawer. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. Job Cockrell writes checks and also record cash payment journal entries. One individual orders inventory, while a differen individual authorizes payments. Unnumbered sales invoices from credit sales are forwarded to the accounting department every four weeks for recording. Indicate whereas each procedure is an example of good internal control or of week internal control. If it is an example of good internal control, indicate which internal control principal is being followed. If it is an example of weak internal control, indicate which internal control principal is being violated.

Explanation / Answer

Solution.

Clasification of GOOD and WEEK internal control.

Procedure IC good or Week Releted IC Principle 1 WEEK Physical Control 2 GOOD Record Keeping 3 WEEK Authorizing Tranjection 4 GOOD Authorizing Tranjection 5 WEEK Record Keeping

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