Below Are Descriptions of Internal Control Problems

question 103

Essay

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.
Internal Control Principles
A. Establishment of responsibility
B. Segregation of duties
C. Physical controls
D. Documentation procedures
E. Independent internal verification
F. Human resource controls
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:

Grades

Evaluations or scores given to students based on their performance in academic coursework or examinations.

Class Participation

The involvement or engagement of students in the learning process, often through asking questions, contributing to discussions, or participating in class activities.

Emotion-Based Strategy

An approach to decision-making and problem-solving that prioritizes emotional responses and feelings over logical analysis or objective data.

Problem-Based Strategy

An educational method focusing on students learning through the experience of solving open-ended problems, fostering analytical thinking and application of knowledge.