100% + A View Zoom Add Page Insert Table Chart Text Shape Media Comment Collaborate Format Document Text PART B - Internal Controls (6) Multiple Examine the Income Statement below. Which of the listed accounts indicate potential problems with internal controls? T List three accounts and explain one reason why the $ amounts lead you to believe that they might be evidence of poor internal control. (2 marks per account - 1 for correct identification, 1 for acceptable Style Layout More reason) 1 Other information that might be useful: 1 Sales Returns and Allowances is used to keep track of customer returns of merchandise Font . It uses the Periodic Method of Inventory . The business uses LIFO as it's cost flow assumption Calibri The business does not track inventory spoilage, loss, etc in a separate account. Anything not in Ending Inventory is included in Cost of Goods Sold 1 Regular C 11 pt Business B U S Income Statement For the year ended April 30, 2022 Character Styles Multiple Sales Revenues ales 90000 Text Color Sales Returns and Allowances 25000 Sales Discounts 1000 Net Sales 54000 E E E Cost of Goods Sold 50000 Gross Profit 14000 Spacing Operating Expenses Multiple C Before Paragraph After Paragraph Bullets & Lists Multiple A= Administrative 2000 Drop Cap v Building and Utilities 9500 Employees 15500 Miscellaneous 7000 Total Operating Expenses 34000 Net Los 20000 ANSWERS