Below Are Descriptions of Internal Control Problems

question 123

Short Answer

Below are descriptions of internal control problems. In the space to the left of each item, enter the code letter of the one best internal control principle that is related to the problem described.
1. The same person opens incoming mail and posts the accounts receivable subsidiary ledger.
2. Three people handle cash sales from the same cash register drawer.
3. A clothing store is experiencing a high level of inventory shortages because people try on clothing and walk out of the store without paying for the merchandise.
4. The person who is authorized to sign checks approves purchase orders for payment.
5. Some cash payments are not recorded because checks are not prenumbered.
6. Cash shortages are not discovered because there are no daily cash counts by supervisors.
7. The treasurer of the company has not taken a vacation for over 20 years.

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Definitions:

Masked Behaviour

Actions or expressions that are deliberately designed to conceal one's true feelings, intentions, or identity.

Modelling

In social science, it refers to the process of learning and adopting behaviors by observing and imitating others.

Frequency Marketing

A promotional strategy that focuses on rewarding customers based on the frequency of their purchases.

Variable Ratio

In the context of behavioral psychology, it's a reinforcement schedule where a response is reinforced after an unpredictable number of responses, often used in gambling and sales strategies.