For Each of the Following Situations,indicate Which Internal Control Procedure

question 64

Essay

For each of the following situations,indicate which internal control procedure Johnson Company has violated:
1.Since they are costly,background checks are not done for the employees.
2.Purchases of items on credit do not need the approval of the purchasing department.
3.All hard copies of documents are shredded after one month and electronic records are deleted after two months.
4.The company does not prepare operating or cash budgets.
5.The accountant receives the checks from customers in payment of amounts due and records the cash receipts.
6.There are no locks in the area where inventory is stored.
7.The hiring,firing and pay adjustments are made by the foremen in the manufacturing area.

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Definitions:

Interest Rates

The cost of borrowing money or the return for lending money, typically expressed as a percentage of the principal amount per annum.

Loanable Funds

The sum of money available for borrowing in the financial markets, where interest rates adjust to match supply and demand.

Interest Rate

The proportion of a total amount of money levied for borrowing it, usually shown as an annual rate percentage.

Loanable Funds Curve

A graphical representation that shows the relationship between the interest rate and the quantity of loanable funds supplied and demanded.