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These procedures are used in The Boutique for cash disbursements ( payments ) . 1 . Checks are stored in an unmarked envelope on a

These procedures are used in The Boutique for cash disbursements (payments).
1. Checks are stored in an unmarked envelope on a shelf behind the cash register.
2. The store manager approves all payments before she writes, signs and sends checks.
3. The store buys used items for resale. All employees may buy resale items by
paying cash from the register. The employee documents a purchase on a piece of
paper, writing the cost and description of the item then signing the paper - and
putting it in the register.
4. After paying the invoices (bills) the bookkeeper places them in the suppliers folder.
5. The bookkeeper prepares the bank deposits and cash records and reports any
discrepancies directly to the owner.
Instructions
For each weakness, suggest a SPECIFIC change in procedure that will result in better internal control. (If you need more space add it by hitting the space bar INSIDE the tables row or column.)
Weakness Specific Recommended Change
1. Checks are not stored in a secure area.
2. The approval and payment of bills is done by the same individual.
3a. Unauthorized employees making purchases.
3b. Use of cash instead of checks; no prenumbered invoices.
4. Filing does not prevent a
bill from being paid more than once.
5. The bank reconciliation is not inde-pendently prepared.

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