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Problem 1: How can management reasonably ensure that business activities are performed in accordance with their objectives?
a) Supervise each employee sufficiently to ensure that he/she is performing all his/her duties correctly b) Spot check each employee to ensure that he/she is performing his/her duties correctly c) Provide each employee with written descriptions of company procedures. Periodically evaluate each employee's performance with regard to compliance with company procedures. d) None of the above
Problem 2: Segregation of duties is a practice that promotes good internal control. Which of the following must NOT be performed by the individual responsible for receiving cash from the customers?
a) Preparing trial balances b) Authorizing the receipt of goods c) Updating shipping records for goods sold d) Writing off uncollectable customer accounts e) Managing the purchases journal
Problem 3: Which of the following must NOT be performed by the person responsible for safe custody of inventory?
a) Receiving cash from customers b) Paying cash to vendors c) Preparing a trial balance d) Authorization to move inventory to shipping e) Authorization to write off bad debt
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