P5 1 Evaluate internal control of cash The following procedures were recently installed by The China Shop (a) All sales are rung up on the cash register, and a receipt is given to the customer All sales are recorded on a record locked inside the cash register (b)Attheendofashift,eachcashiercountsthecashinhisorhercashregister,unlocksthecashregisterrecord,andcomparestheamountofcashwiththeamountontherecordtodeterminecashshortagesandoverages (c)Checksreceivedthroughthemailaregivendailytotheaccountsreceivableclerkforrecordingcollectionsonaccountandfordepositinginthebank (d) Disbursements are made from the petty cash fund only after a petty cash receipt has been completed and signed by the payer (e) Each cashier is assigned a separate cash register drawer to which no other cashier has access (f) The bank reconciliation is prepared by the accountant (g) Vouchers and all supporting documents are perforated with a PAID designation after being paid by the treasurer Instruction Indicate whether each of the procedures of internal control over cash represents (1) a strength or (2) a weakness For each weakness, indicate why it exists

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P5-1 Evaluate internal control of cash The following procedures were recently installed by The China Shop: (a) All sales are rung up on the cash

P5-1 Evaluate internal control of cash

The following procedures were recently installed by The China Shop:

(a) All sales are rung up on the cash register, and a receipt is given to the customer. All sales are recorded on a record locked inside the cash register.
(b)Attheendofashift,eachcashiercountsthecashinhisorhercashregister,unlocksthecashregisterrecord,andcomparestheamountofcashwiththeamountontherecordtodeterminecashshortagesandoverages.
(c)Checksreceivedthroughthemailaregivendailytotheaccountsreceivableclerkforrecordingcollectionsonaccountandfordepositinginthebank.
(d) Disbursements are made from the petty cash fund only after a petty cash receipt has been completed and signed by the payer.
(e) Each cashier is assigned a separate cash register drawer to which no other cashier has access.
(f) The bank reconciliation is prepared by the accountant.
(g) Vouchers and all supporting documents are perforated with a PAID designation after being paid by the treasurer.

Instruction

Indicate whether each of the procedures of internal control over cash represents (1) a strength or (2) a weakness. For each weakness, indicate why it exists.