The Yazoo Company, a client of your firm, has come to you with the following problem: It has three clerical employees who must perform these functions: 1 Maintain general ledger 2 Maintain accounts payable ledger 3 Maintain accounts receivable ledger 4 Prepare checks for signature 5 Maintain disbursements journal 6 Issue credits on returns and allowances 7 Reconcile the bank account 8 Handle and deposit cash receipts Assuming that there is no problem as to the ability of any of the employees, the company requests that you assign the above functions to the three employees in such a manner as to achieve the highest degree of internal control. It may be assumed that these employees will perform no other accounting functions than the ones listed and that any accounting functions not listed will be performed by persons other than these three employees.

1. State how you would distribute the above functions among the three employees. Assume that, with the exception of the nominal jobs of the bank reconciliation and the issuance of credits on returns and allowances, all functions require an equal amount of time.

2. List four possible unsatisfactory combinations of the above-listed functions.