Problem
A. Eddie works at a clothing store in the mall. He sees that his manager is very busy. At the end of the day, Eddie offers to count the cash in the cash register, deposit it at the bank, and account the accounting journal entries. What is the risk in this situation? Explain using the concept of separation of duties.
B. Internal control procedures are important in every business, but at what stage in the development of a business do they become critical?
C. Why are internal controls important in business? List the fundamental principles of internal control?
D. Define advantages and disadvantages of First in First Out, Moving Weighted average method, and specific identification method.
E. Does the accounting principle of consistency disallow any changes from one accounting method to another?
F. What is meant when it said that inventory errors correct themselves?