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jenyasd209 [6]
3 years ago
15

Identify which control activity is violated in each of the following situations, and explain how the situation creates an opport

unity for fraud or inappropriate accounting practices.
1. Once a month, the sales department sends sales invoices to the accounting department to be recorded.

2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise.

3. Several clerks at Great Foods use the same cash register drawer
Business
1 answer:
lesantik [10]3 years ago
8 0

Answer:

1. Once a month, the sales department sends sales invoices to the accounting department to be recorded.

⇒ documentation procedures

Unless all of the company's sales take place only once a month, sales should be recorded as soon as possible. Accounting records must be as precise and accurate as possible, and they must be processed on time. Stacking invoices makes no sense, since sales might be on cash or the collection period might be very short. Who holds the money until the sales records are made?

2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise.

⇒ segregation of duties

One single person cannot be responsible for the whole process, since this creates a huge opportunity for fraud. Imagine if the person in charge of the inventory is also in charge of making new purchases, paying for them and reporting ending inventory. No company would be able survive one year, while the person in charge would get rich.

3. Several clerks at Great Foods use the same cash register drawer

⇒ establishment of responsibility

If everyone is allowed to collect money, no one can be responsible for any loss.

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Answer:

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Explanation:

In this question, we have to compare the cost which is shown below:

If we considered the reworked cost, then the sales would be

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Runner's warehouse purchased digital watches for $92.99. its markup rate is 25% based on the selling price. what is the selling
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Okay. So the warehouse bought the digital way Che's for $92.99 and they're gonna sell it to people for 25% more. So what we do is 92.99 * 125% or 1.25 in decimal form. When we multiply the numbers together, the product is 116.2375 or 116.24 when rounded to the nearest hundredth. The selling price of the digital watches is $116.24.
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3 years ago
Lincoln, Inc., which uses a volume-based cost system, produces cat condos that sell for $90 each. Direct materials cost $15 per
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Answer:

The gross profit margin for the cat condo is 50%

Explanation:

Since the gross profit per unit is not given, so first we have to find it. The calculation is shown below:

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7 0
3 years ago
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julia-pushkina [17]

Answer:

$125,000

Explanation:

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Sales revenue                                            $115,000

Add: Accounts receivable decrease        <u>$10,000</u>

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The sales revenue adjusted to a cash basis for the year is $125,000.

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