The Following Procedures Were Recently Implemented at Health Station, Inc

question 127

Essay

The following procedures were recently implemented at Health Station, Inc. For each procedure, indicate whether the internal control over cash represents
(1) a strength or (2) a weakness. If it is a weakness, explain why.?
(a) All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares alisting of the cash receipts and forwards a copy of the list to the accounts receivable clerk forrecording in the accounts.?
(b) The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supportingdocumentation is forwarded to the treasurer's office for approval.?
(c) At the end of each day, all cash receipts are placed in the bank's night depository.?
(d) The bank reconciliation is prepared by the cashier, who works under the supervision of the treasurer.

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Definitions:

Business Environment

The combination of internal and external factors that influence a company's operating situation, including economic, legal, and market conditions.

Unusual In Nature

An occurrence or characteristic that is not common or ordinary, often requiring special consideration or treatment.

Infrequent Occurrence

Events or transactions that are not expected to happen regularly or often within the normal course of business.

Accounting Principle

Fundamental guidelines or rules that govern the accounting process, ensuring that financial statements are accurate, reliable, and consistent.