The Following Procedures Were Recently Implemented at Pampered Pets, Inc

question 128

Essay

The following procedures were recently implemented at Pampered Pets, 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) At the end of the day, cash register clerks are required to use their own funds to make up any cash shortagesin their registers.​
(b) At the end of the day, an accounting clerk compares the duplicate copy of the daily cash deposit slip with thedeposit receipt obtained from the bank.​
(c) After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails thecheck. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucherand supporting documentation to the accounts payable clerk for filing.​
(d) Along with the petty cash receipts for postage, office supplies, etc., several postdated employeechecks are in the petty cash fund.

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Definitions:

Weighted-Average Method

An inventory costing method that assigns a weighted average cost to each unit of inventory, used to calculate cost of goods sold and ending inventory.

First-In, First-Out

An inventory valuation method where the oldest items in inventory are sold or used first.

Equivalent Units

A concept in cost accounting used to calculate the work done on partially completed goods, expressed in terms of fully completed units.

Cost Reconciliation Report

A document used to reconcile and verify the costs incurred by a department or project against the budgeted or expected costs.