Question

Gary's Great Cars purchases​ high-performance auto parts from a Nebraska vendor. Dave​ Simon, the accountant for​ Gary's, verifies receipt of merchandise and​ then, prepares,​ signs, and mails the check to the vendor. Identify the internal control weakness over cash payments.

Answer 1

The internal control weakness over cash payments in Gary's Great Cars is that the same person, Dave Simon, is responsible for both verifying the receipt of merchandise and preparing, signing, and mailing the check.

Step-by-step explanation:

The internal control weakness over cash payment in Gary's Great Cars is that Dave Simon, the accountant, prepares, signs, and mails the check to the vendor after verifying the receipt of merchandise.

This means that Dave has control over both the verification and payment processes, which increases the risk of fraudulent activities.

A stronger internal control would be to have a separate person responsible for verifying the receipt and another person responsible for preparing, signing, and mailing the check, to ensure checks and balances in the process.