Internal Control Weaknesses in Cash Receipts and Payment

School: Indiana Institute of Technology - Course: ACC 1010 - Subject: Accounting

Chapter 8 Homework Problem E8-13 20 Points Total Overall 5 Points - This Tab Name: Shonda Jackson E8-13 Requirement 1 There appears to be a weakness in the internal control over cash reciepts. The cash register does not keep an internal record of sales. The worker counts the cash in the drawer at the end of the day. Requirement 2 To avoid these weaknesses I believe that the following should be implemented: 1. Manager should count the cash in the drawer at the end of the day and compare it to the register tapes. 2. The cash register should keep internal records of sales. 3. The register tape should be submitted to the accounting department to journalize the cash sales.

Chapter 8 Homework Problem E8-14 5 Points Name:Shonda Jackson E8-14 Requirement 1 The same person is responsible for confirming receipts of merchandising, authorizations of payments and the preparation of payments. Requirement 2 In order to avoid these weaknesses they should actualize the following: 1. Purchase orders should be used to authorize inventory purchases. 2. The accountant should collect the receiving reports and purchase order from all departments before discharging payments. 3. The receipts of goods should be authenticated by someone besides the accountant or the individual authorizing the purchase. 4. The accountant should not submit the purchase order.