Internal controls (Learning Objective 2) 5–10 min.

Peter’s Hardware maintains the following policies/procedures with regard to internal control. Indicate by letter which of the following control activities applies to each of the following policies/procedures:

_____ 1. Every day, all checks written are recorded in the accounting records using the information on the check stubs.

a. Proper authorization

b. Adequate documents and records

c. Restricted access

d. Security measures

e. Separation of duties _____ 2. The store utilizes electronic theft detection systems.

_____ 3. Purchases of new equipment must be approved by the store manager.

_____ 4. Daily sales are recorded in the accounting records by someone other than the sales associates.

_____ 5. The company maintains passwords that limit access to its computerized accounting records.

AppendixLO1