The following control procedures are used in Kelly Erins Boutique Shoppe for cash disbursements. 1. The company

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The following control procedures are used in Kelly Erin’s Boutique Shoppe for cash disbursements.
1. The company accountant prepares the bank reconciliation and reports any discrepancies to the owner.
2. The store manager personally approves all payments before signing and issuing checks.
3. Each week, Kelly leaves 100 company checks in an unmarked envelope on a shelf behind the cash register.
4. After payment, bills are filed in a paid invoice folder.
5. The company checks are unnumbered.
Instructions
(a) For each procedure, explain the weakness in internal control, and identify the internal control principle that is violated.
(b) For each weakness, suggest a change in the procedure that will result in good internal control.

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Accounting Principles

ISBN: 978-0470534793

10th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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