1. The Kernow Company, a client of your firm, has come to you with the following problem. It has three clerical employees who must perform these functions:

i) Maintain general ledger

ii) Maintain purchase (creditors) ledger

Iii) Maintain sales (debtors) ledger

iv) Prepare cheques for signature (including checking supporting documentation)

v) Maintain expenses journal (recording expenses paid)

vi) Issue sales credit notes

vii) Reconcile bank statement

viii) Handle and bank cash receipts.

The directors wish to achieve the highest degree of internal control.

Required:

a) How would you distribute the above functions among the three employees?

b) Suggest a possible satisfactory combination of the functions listed above.

Assume that there is no problem with the competence of any of the employees and that the three employees perform no other accounting function except for those above.