Franco Company is a rapidly growing start-up business. Its recordkeeper, who was hired six months ago, left town after the company’s manager discovered that a large sum of money had disappeared over the past three months. An audit disclosed that the recordkeeper had written and signed several checks made payable to her fiancé and then recorded the checks as salaries expense. The fiancé, who cashed the checks but never worked for the company, left town with the recordkeeper. As a result, the company incurred an un-insured loss of $ 184,000. Evaluate Franco’s internal control system and indicate which principles of internal control appear to have been ignored.
Answer to relevant QuestionsPalmona Co. establishes a $ 200 petty cash fund on January 1. On January 8, the fund shows $ 38 in cash along with receipts for the following expenditures: postage, $ 74; transportation-in, $ 29; delivery expenses, $ 16; and ...Prepare the adjusting journal entries that Del Gato Clinic must record as a result of preparing the bank reconciliation in Exercise 8- 10.In Exercise 8- 10, Del Gato Clinic deposits all cash receipts on the day when they are ...Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $ 1,028.05 and No. 5893 for $ 494.25. The following information is ...Refer to Polaris’ financial statements in Appendix A to answer the following. 1. For both years ended December 31, 2011 and 2010, identify the total amount of cash and cash equivalents. Determine the percent (rounded to ...Part 1. Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio. The partnership’s capital balances are as follows: Meir, $ 168,000; Benson, $ 138,000; and Lau, $ 294,000. Benson decides to withdraw ...
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