Internal Control and Cash al control E7.2 (LO 1, 2) C The following control procedures are used in Sheridan Company for cash receipts. 1. To minimize the risk of robbery, cash in excess of $200 is stored in a locked metal box in the office manager's office until it is deposited in the bank. All employees know where the office manager keeps the key to the box. 2. The company has one cash register with a single cash drawer. Any one of three employees may operate the cash register. 3. All employees handling cash receipts are experienced and therefore are not bonded. 4. In order to increase efficiency, the assistant controller opens all of the mail, prepares the bank deposit, and prepares the journal entries to record the cash receipts. 5. Due to a lack of storage space, all remittance advices and debit or credit card sales receipts are destroyed each weekend. Instructions a. For each procedure, explain the weaknesses in internal control, and identify the control activity that is violated b. For each weakness, suggest a change in procedure that will result in good internal control. Eestions. (15 Marks) the best answer for each of the following 1) Internal are hired by CA fems to audit business firms. e employees of the Canada Revenue Agency who waste the Internal control of companies filing tax returns. evaluate the system of internal controls for the companies that employ them. cannot evaluate the system of internal controls of the company that employs them becaus they are not independent 2) Acompany that will goods to customers proprietorshi corporation merchandising company diny. 3) Woods in transitare ed in these has legal title to the s h the buyer has ingate to the wh the buyer is response for paying the one has alte to the godsh ared o le camere charges e d the The retailer considers VISA and MasterCard al cash sales bi promiseryales c redit sales d) contingent sales Internal Control and Cash al control E7.2 (LO 1, 2) C The following control procedures are used in Sheridan Company for cash receipts. 1. To minimize the risk of robbery, cash in excess of $200 is stored in a locked metal box in the office manager's office until it is deposited in the bank. All employees know where the office manager keeps the key to the box. 2. The company has one cash register with a single cash drawer. Any one of three employees may operate the cash register. 3. All employees handling cash receipts are experienced and therefore are not bonded. 4. In order to increase efficiency, the assistant controller opens all of the mail, prepares the bank deposit, and prepares the journal entries to record the cash receipts. 5. Due to a lack of storage space, all remittance advices and debit or credit card sales receipts are destroyed each weekend. Instructions a. For each procedure, explain the weaknesses in internal control, and identify the control activity that is violated b. For each weakness, suggest a change in procedure that will result in good internal control. Eestions. (15 Marks) the best answer for each of the following 1) Internal are hired by CA fems to audit business firms. e employees of the Canada Revenue Agency who waste the Internal control of companies filing tax returns. evaluate the system of internal controls for the companies that employ them. cannot evaluate the system of internal controls of the company that employs them becaus they are not independent 2) Acompany that will goods to customers proprietorshi corporation merchandising company diny. 3) Woods in transitare ed in these has legal title to the s h the buyer has ingate to the wh the buyer is response for paying the one has alte to the godsh ared o le camere charges e d the The retailer considers VISA and MasterCard al cash sales bi promiseryales c redit sales d) contingent sales