Horngren's Accounting (11th Edition)
11th Edition
ISBN: 9780133856781
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
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Chapter 9, Problem E9.15E
E9-15 Identifying and correcting internal control weakness
| Learning Objective 1 |
Suppose The Right Rig Dealership is opening a regional office in Omaha. Cary Regal, the office manager, is designing the internal
• The credit department runs a credit check on all customers who apply for credit. When an account proves uncollectible, the credit department authorizes the write-off of the accounts receivable.
• Cash receipts come into the credit department, which separates the cash received from the customer remittance slips. The credit department lists all cash receipts by customer name and amount of cash received.
• The cash goes to the treasurer for deposit in the bank. The remittance slips go to the accounting department for posting to customer accounts.
• The controller compares the daily deposit slip to the total amount posted to customer accounts. Both amounts must agree.
Recall the components of internal control. Identify the internal control weakness in this situation, and propose a way to correct it.
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Students have asked these similar questions
Identifying and correcting internal control weakness
Suppose The Right Rig Dealership is opening a regional office in Omaha. Cary Regal, the office manager, is designing the internal control system. Regal proposes the following procedures for credit checks on new customers, sales on account, cash collections, and write-offs of uncollectible receivables:
The credit department runs a credit check on all customers who apply for credit. When an account proves uncollectible, the credit department authorizes the write- off of the accounts receivable.
Cash receipts come into the credit department, which separates the cash received from the customer remittance slips. The credit department lists all cash receipts by customer name and amount of cash received.
The cash goes to the treasurer for deposit in the bank. The remittance slips go to the accounting department for posting to customer accounts.
The controller compares the daily deposit slip to the total amount posted to customer accounts.…
of
E9-15 Identifying and correcting internal control weakness
Suppose The Right Rig Dealership is opening a regional office n Omaha. Cary Regal
the office manager, is designing the internal control system. Regal proposes the follow
ing procedures for credit checks on new customers, sales on account, cash collections
and write-offs of uncollectible receivables:
ective 1
The credit department runs a credit check on all customers who apply for credit
When an account proves uncollectible, the credit department authorizes the write-
off of the accounts receivable.
Cash receipts come into the credit department, which separates the cash received
from the customer remittance slips. The credit department lists all cash receipts by
customer name and amount of cash received.
The cash goes to the treasurer for deposit in the bank. The remittance slips go to
the accounting department for posting to customer accounts.
The controller compares the daily deposit slip to the total amount posted to…
Internal Control-Fraud Triangle
Identify the fraud triangle risk factor (opportunity-O, pressure-P or
rationalization-R) in each situation.
1.
2.
3.
Employeees are told to report increased income or be fired.
Several sales clerks share the same cash drawer.
A worker did not receive a bonus this year and now feels it's okay
to use the company credit cared for personal expenses.
4.
Doors safeguarding valuable merchandise are not locked with a
passcode.
An employee feels underpaid and believes stealing inventory is
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5.
Chapter 9 Solutions
Horngren's Accounting (11th Edition)
Ch. 9 - 1. With good internal controls, the person who...Ch. 9 - Prob. 2QCCh. 9 - Which of the following is a limitation of the...Ch. 9 - 3. The entry to record a write-off of an...Ch. 9 - Brickman Company uses the allowance method to...Ch. 9 - Brickman’s ending balance of accounts Receivable...Ch. 9 - At December 31 year-end, Crain Company has an...Ch. 9 - Using the data in the preceding question, what...Ch. 9 - At year-end, Schultz Company has cash of $11,600,...Ch. 9 - Using the data in the preceding question, assume...
Ch. 9 - What is the difference between accounts receivable...Ch. 9 - List some common examples of other receivables,...Ch. 9 - Prob. 3RQCh. 9 - When dealing with receivables, give an example of...Ch. 9 - What type of account must the sum of all...Ch. 9 - Prob. 6RQCh. 9 - What occurs when a business factors its...Ch. 9 - What occurs when a business pledges its...Ch. 9 - What is the expense account associated with the...Ch. 9 - When is bad debts expense recorded when using the...Ch. 9 - What are some limitations of using the direct...Ch. 9 - Prob. 12RQCh. 9 - Prob. 13RQCh. 9 - When using the allowance method, what account is...Ch. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - How do the percent-of-receivables and...Ch. 9 - What is the difference between the...Ch. 9 - In accounting for bad debts, how do the income...Ch. 9 - What is the formula to compute interest on a note...Ch. 9 - Prob. 21RQCh. 9 - Prob. 22RQCh. 9 - Prob. 23RQCh. 9 - Prob. 24RQCh. 9 - Prob. S9.1SECh. 9 - Prob. S9.2SECh. 9 - Applying the direct write-off method to account...Ch. 9 - Collecting a receivable previously written...Ch. 9 - Applying die allowance method to account for...Ch. 9 - Applying the allowance method (percent-of-sales)...Ch. 9 - Applying the allowance method...Ch. 9 - Applying the allowance method...Ch. 9 - Computing interest amounts on notes receivable A...Ch. 9 - Accounting for a note receivable On June 6,...Ch. 9 - Accruing interest revenue and recording collection...Ch. 9 - Recording a dishonored note receivable Midway...Ch. 9 - Using the acid-test ratio, accounts receivable...Ch. 9 - Defining common receivables terms Learning...Ch. 9 - E9-15 Identifying and correcting internal control...Ch. 9 - Journalizing transactions using the direct...Ch. 9 - Prob. E9.17ECh. 9 - Prob. E9.18ECh. 9 - Accounting for uncollectible accounts using the...Ch. 9 - Prob. E9.20ECh. 9 - Prob. E9.21ECh. 9 - Journalizing note receivable transactions...Ch. 9 - Journalizing note receivable transactions The...Ch. 9 - Journalizing note receivable transactions Like New...Ch. 9 - Evaluating ratio data Chippewa Carpets reported...Ch. 9 - Prob. E9.26ECh. 9 - Accounting for uncollectible accounts using the...Ch. 9 - Accounting for uncollectible accounts using the...Ch. 9 - Accounting for uncollectible accounts using the...Ch. 9 - Prob. P9.30APGACh. 9 - Accounting for notes receivable and accruing...Ch. 9 - Accounting for notes receivable, dishonored notes,...Ch. 9 - Prob. P9.33APGACh. 9 - Prob. P9.34BPGBCh. 9 - Prob. P9.35BPGBCh. 9 - Prob. P9.36BPGBCh. 9 - Prob. P9.37BPGBCh. 9 - Prob. P9.38BPGBCh. 9 - Prob. P9.39BPGBCh. 9 - Prob. P9.40BPGBCh. 9 - Prob. P9.41CPCh. 9 - Accounting for uncollectible accounts using the...Ch. 9 - Decision Case 9-1 Weddings on Demand sells on...Ch. 9 - Decision Case 9-2 Pauline’s Pottery has always...Ch. 9 - Prob. 9.1FCCh. 9 - > Financial Statement Case 9-1 Use Starbucks...
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