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Accounting Quiz

This document contains an activity from a 2012 Grade 11 financial accounting principles unit on internal controls and financial analysis. It describes 3 scenarios and asks the reader to identify the appropriate internal controls for each. The scenarios include a circus ringmaster collecting admission money, a dentist recording patient visits and invoices, and a computer store employee stealing merchandise. The appropriate controls are a, b, c for scenario 1; a, b, d for scenario 2; and b, c, f for scenario 3.

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Misty Tranquil
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600 views3 pages

Accounting Quiz

This document contains an activity from a 2012 Grade 11 financial accounting principles unit on internal controls and financial analysis. It describes 3 scenarios and asks the reader to identify the appropriate internal controls for each. The scenarios include a circus ringmaster collecting admission money, a dentist recording patient visits and invoices, and a computer store employee stealing merchandise. The appropriate controls are a, b, c for scenario 1; a, b, d for scenario 2; and b, c, f for scenario 3.

Uploaded by

Misty Tranquil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BAF3M (2012): Financial Accounting Principles

(2012), Grade 11,


Unit 6: Internal Controls and Financial Analysis
Activity 1: Internal Control

Answer Key of Quiz


You will read about 3 scenarios and spot the internal controls relative to the
scenario.

Scenario 1
The circus is in town, and Bob is the ringmaster. Bob stands outside the tent for
Flossy, the world’s only talking cow. Bob calls out to the crowd, “Just $5.00 to
see the world’s only talking cow! Pay your money and go right in and talk with
Flossy.”
Bob, the ringmaster takes the cash from the customers and then lets them in to
see Flossie, the talking cow. At the end of the day he gives the money he has
collected to the circus owner.

Which internal control(s) should be in place in this situation. Highlight the 3


answer.
a) Separation of responsibilities for related operations.
b) Custody of assets should be separate from the accounting of assets.
c) Assets should be kept in a safe place.
d) Responsibilities should be clearly assigned.
e) Approval of transactions should be done by key employees.
f) Rotating staff and mandatory vacations.
g) Use pre-numbered documents.
Scenario 2
Bert the dentist has just finished examining Frieda’s teeth. “Good for you Frieda,
you only have 14 cavities. I will just record that on the computer on your chart
and you can go.” Bert records the visit on Frieda’s chart and at the same time
generates an invoice on the computer system.
Frieda goes out to see Carol, the receptionist, who says “I’ll just print your invoice
from the computer that Dr. Bert recorded on your chart. That comes to $145.00.
Let’s see, you paid by cash.”
Bert the dentist records the invoice on the patient’s computerized chart. Carol
the receptionist prints the invoice and collects the payment from the patient.

Which internal control(s) should be in place in this situation? Highlight the 3


answers.
a) Separation of responsibilities for related operations.
b) Custody of assets should be separate from the accounting of assets.
c) Assets should be kept in a safe place.
d) Responsibilities should be clearly assigned.
e) Approval of transactions should be done by key employees.
f) Rotating staff and mandatory vacations.
g) Use pre-numbered documents.

Scenario 3
Louie is a salesman in a computer store. He is talking on the telephone with a
customer. “Right Mr. Leduc, we have that computer system in stock. I can have it
ready for you by Tuesday.”
On his way out of the store that day, Louie spots the i-pods and says to himself,
“I need one of these i-pods, and my employer doesn’t pay me enough anyways.”
Louie steals an i-pod from the computer store he works at.

Which internal control(s) should be in place in this situation. Highlight the


answer.
a) Separation of responsibilities for related operations.
b) Custody of assets should be separate from the accounting of assets.
c) Assets should be kept in a safe place.
d) Responsibilities should be clearly assigned.
e) Approval of transactions should be done by key employees.
f) Rotating staff and mandatory vacations.
g) Use pre-numbered documents.

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