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Brief Exercise 7-4 The internal control procedures in Varma Company provide that: Identify the principles of internal control that are being followed. 1. Employees who have physical custody of assets do not have access to the accounting records 2. Each month, the assets on hand are compared to the accounting records by an internal auditor 3. A prenumbered shipping document is prepared for each shipment of goods to customers. SHOW ANSWER CALCULAI Brief Exercise 7-5 Rahman Ltd. has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure. 1. All over-the-counter receipts are entered on cash registers. 2 2. All cashiers are bonded. 3. Daily cash counts are made by cashier department supervisors. 4. The duties of receiving cash, recording cash, and custody of cash are assigned to different individuals. 5. Only cashiers may operate cash registers. ES Brief Exercise 7-8 Helena Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure. 1. Company checks are prenumbered. 2. The bank statement is reconciled monthly by an internal auditor. 3. Blank checks are stored in a safe in the treasurer's office. 4 Only the treasurer or assistant treasurer may sign checks C . Check signers are not allowed to record cash disbursement transactions vel udy

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