Question

1. Identify each of the following controls as preventive, detective or corrective (NOTE, SOME MAY FALL INTO MORE THAN 1 CATEGORY) then, explain your answer: a. Separation of duties b. Camera system placed behind a cash register C. Background checks on all new employee hires d. Locking doors and windows at night e. Purchasing a fire insurance policy f. Preparing reconciliations for the cash account

Answer 1

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a.	Separation of duties	Preventive.
b.	Camera system place behind cash register	Detective
c.	Background check on all new employee hires.	Preventive, Detective.
d.	Locking doors and windows at night	Preventive.
e.	Purchasing a dire insurance policy.	Preventive.
f.	Preparing reconciliation for the cash account.	Preventive, Corrective.

Journal Entry
Serial No.	Account	Debit $	Credit $
a.	Petty Cash	250.00
	Cash		250.00
b.	Delivery Expense	20.00
	Supplies Expense	15.00
	Travel Expense	50.00
	Petty Cash		85.00
b.	Petty Cash	250.00
	Less: Expense	85.00
	Balance	165.00
	Actual Balance	155.00
	Miscellaneous Expense	10.00
	Journal Entry
	Miscellaneous Expense	10.00
	Petty Cash		10.00
c.	Petty Cash	145.00
	Cash		145.00
	Company raised petty cash amount from $ 250 to $ 300
	Balance already in Petty cash account			155.00
	Balance should be in Petty cash account			300.00
	Balance to be added to Petty cash account			145.00