The Gardner Company, a client of your firm, has come to you with the following problem. It

Question:

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

a. Maintain the general ledger

b. Maintain the accounts payable ledger

c. Maintain the accounts receivable ledger

d. Prepare checks for signature

e. Maintain the cash disbursements journal

f. Issue credits on returns and allowances

g. Reconcile the bank account

h. Handle and deposit cash receipts

Assuming equal abilities among the three employees, the company asks you to assign the eight functions to them to maximize internal control. Assume that these employees will perform no accounting functions other than the ones listed.

Required

a. List four possible unsatisfactory pairings of the functions.

b. State how you would distribute the functions among the three employees. Assume that with the exception of the nominal jobs of the bank reconciliation and the issuance of credits on returns and allowances, all functions require an equal amount of time.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...