The Following Procedures Were Recently Implemented at the Health Station

question 128

Essay

The following procedures were recently implemented at the 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, please explain why.
(a) All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares a listing of the cash receipts and forwards a copy of the list to the accounts receivable clerk for recording in the accounts.
(b) The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation 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:

Human Capital

The combined abilities, expertise, and experiences owned by a person or a group, regarded in relation to their worth or expense to a company or nation.

Capital Goods

Long-lasting goods used in the production of other goods or services, such as machinery, buildings, and equipment.

Life Span

The length of time for which a living organism, including humans, exists, from birth to death.

Capital Stock

The total amount of physical, durable goods that a company possesses at any given time, which are used in producing goods and services.