Question

current attempt in progress
jolson company has the following internal control procedures over cash receipts.
identify the internal control principle that is applicable to each procedure.
a. all over - the - counter receipts are entered in cash registers.
b. all cashiers are bonded.
c. daily cash counts are made by cashier department supervisors.
d. the duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals.
e. only cashiers may operate cash registers.

Explanation:

• a. All over - the - counter receipts are entered in cash registers: Cash registers provide a record of transactions, which serves as documentation. This helps in verifying the amount of cash received.
• b. All cashiers are bonded: Bonding protects the company against losses due to employee theft. It is a form of insurance.
• c. Daily cash counts are made by cashier department supervisors: Supervisors checking the cash count is a form of independent internal verification. It ensures that the recorded cash and the actual cash on hand match.
• d. The duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals: Segregating these duties reduces the risk of fraud. For example, if one person had all these duties, they could steal cash and cover it up in the records.
• e. Only cashiers may operate cash registers: Limiting access to cash registers (a physical asset) to only authorized personnel (cashiers) is an example of physical controls.

Answer:

a. Documentation procedures
b. Bonding of employees (Insurance)
c. Independent internal verification
d. Segregation of duties
e. Physical controls