For goods to be returned to the vendor, the storekeeper prepares a goods returned report in...
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For goods to be returned to the vendor, the storekeeper prepares a goods returned report in duplicate. A copy is sent to the vendor and the duplicate copy is filed numerically. When the accounts payable department receives the credit note directly from a vendor, the accounts payable ledger and purchases journal are updated, and the credit note is filed by vendor name in alphabetical order. (a) Identify the major internal control weaknesses inherent in the present system. (b) What specific control procedures would you expect to find if Tai Fat Manufacturing Ltd.'s internal control structure over purchases and cash payments was effective? For goods to be returned to the vendor, the storekeeper prepares a goods returned report in duplicate. A copy is sent to the vendor and the duplicate copy is filed numerically. When the accounts payable department receives the credit note directly from a vendor, the accounts payable ledger and purchases journal are updated, and the credit note is filed by vendor name in alphabetical order. (a) Identify the major internal control weaknesses inherent in the present system. (b) What specific control procedures would you expect to find if Tai Fat Manufacturing Ltd.'s internal control structure over purchases and cash payments was effective?
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The major control weaknesses that are likely to be experienced in these cases include Operation... View the full answer
Related Book For
Cost Management Measuring, Monitoring and Motivating Performance
ISBN: 978-1119185697
3rd Canadian edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang-Hsuan Chen, Gail Cook
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