1. Internal control is concerned is only with enhancing the accuracy of the accounting records. Do you agree? explain.

2. What are the advantages of using subsidiary ledgers/

3. When are posting normally made to (1) the subsidairy ledgers and (2) the general ledger control accounts?

4. Decribe the relationship between a control account and asubsidiary ledger.

5. Identify the principles and limitations of internal control.

Caterpilla tractors buys wheels from wheels R Us in Oder to complete the manufacture of its tractors. The Mina brothers work for Caterpilla tractors. Sam works in the purchasing department while Peter works in the accounting department. The business is starting out and has a system in place such as that the purchasing department also receives the wheels when they are delivered to the business. Sam orders the wheels from his best friends business, Wheels R Us. The order fro the parts is processed through the accounting system by Sam, and Peter pays wheels R Us once notified by Sam that the wheels have been received.

Required: Identify which of the five principles of internal control you feel is lacking in the aforementioned scenario. (Note: It may not be possible to observe all the principles.)