Question
Choose one of the items listed below (you may not choose an item someone else has responded to unless all of them have been addressed.)
Choose one of the items listed below (you may not choose an item someone else has responded to unless all of them have been addressed.) Include the number of the item in the subject line of your posting. Indicate whether there are any Internal Control violations in the item. If there are, make a suggestion of how to improve the process.
Select Company is a retail company that sells plumbing supplies. It has both cash sales and sales on account. The procedures Select uses to handle cash and checks received for payments on account are described below:
- The store begins the day with whatever amount of cash remains in the cash register from the prior day. There is not a predetermined amount for this.
- Each sales associate can handle all transactions, including returns and unusual transactions, without approval from a supervisor.
- When Select sends a bill to a customer, it does not provide a tear-off portion to return with the payment.
- The mailroom prepares a list of all the checks received for a day and files it in a mailroom filing cabinet. No duplicate list is made.
- The checks themselves are sent to the controllers office. The controllers office creates the journal entry to update the accounts receivable and record the cash receipts.
- Someone in the controllers office endorses the checks just prior to sending them to bank for deposit.
- At the end of the day, one of the sales associates takes the cash drawer and the cash register tape to a private area to count the cash and make a written report of the sales and cash received. The cash, the register tape, and a copy of the report are sent to the controllers department.
- The controller prepares the deposit slip and sends the deposit to the bank. The controller then makes a journal entry to record the cash sales.
- When the bank statement is received, it is sent to the controller, who prepares the bank reconciliation.
I need analysis for # 5, 8 and 9
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