The Following Internal Control Procedures Are Used by Brooks Company

question 64

Essay

The following internal control procedures are used by Brooks Company for cash receipts and disbursements:
1. Cashiers receive all over-the-counter receipts and place the cash into a single cash drawer.
2. When cash in the drawer exceeds $500, it is placed in an envelope marked "cash" and stored in a drawer in the supervisor's office.
3. The company's accountant makes daily bank deposits.
4. The clerk in the receiving department authorizes all payments for purchases.
5. Blank cheques are kept in the main office.
Instructions
For each of the above procedures, explain the weakness in internal control, identify the control policy or procedure violated and suggest a change in procedure that will result in better control.

Learn the roles and challenges faced by tempered radicals in organizations.

Understand the importance of involving management and building support for change initiatives.

Identify the stages involved in the organizational development process.

Grasp the concept of incremental change and its application in organizational settings.

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Definitions:

Free Market Equilibrium

A state in an economy where supply meets demand naturally without intervention, and prices are determined by free market forces.

Price Controls

Government-imposed limits on the prices that can be charged for goods and services in a market.

Consumers Gain

The benefit or surplus that consumers receive from purchasing goods and services at a price lower than their maximum willingness to pay.

Own Price Elasticity

The responsiveness of the quantity demanded of a good to a change in its own price.