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Bad checks and separations of duties

Consider the following scenarios: (Please respond to each scenario)

* When we talk about "bad checks," are those always checks our customers have written to us? Explain. Would the company also write any bad checks and what are the repercussions for the same? Give examples to support your answer.
* Suppose one person opens the cash receipts (checks received in the mail), makes the bank deposits, and keeps the A/R records. What top 3 potential problems could arise due to lack of separation of duties?

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Scenario one:
Bad checks can also result from the recipient writing their own check, counting on a bad check to be good and adding funds to the recipient's account. Without those funds, the recipient's check is bad. For this reason, it is always best to wait for a check to clear before using the funds. This same problem could present itself to a small company's purchasing checks should there be a significant number of "bad" checks received by the AC department, deposited in the company account and used for company ...

Solution Summary

Two scenarios offering questions beyond initial thoughts

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