Access controls prevent and detect unauthorized and illegal access to the firm's assets. The physical assets at risk in the revenue cycle are inventories and cash. Limiting access to these items would NOT include: A) Locking cash drawers and safes in the cash receipts department B) Making the mail room responsible for opening and recording cash and cheques received from clients C) Warehouse security, such as fences, alarms, and guards D) Using a safe or night deposit box for cash

Access controls prevent and detect unauthorized and illegal access to the firm's assets. The physical assets at risk in the revenue cycle are inventories and cash. Limiting access to these items would NOT include: A) Locking cash drawers and safes in the cash receipts department B) Making the mail room responsible for opening and recording cash and cheques received from clients C) Warehouse security, such as fences, alarms, and guards D) Using a safe or night deposit box for cash

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following is a best practice when handling cash? (A) Always perform background checks on people handling cash (B) Be sure to implement a cash handling process (C) Make sure cash handling procedures are always segregated (D) All of the above
Which of the following reflects a weak internal control system? Oa. All employees must take their vacations. Ob. A single employee is responsible for collecting and recording cash. Oc. A single employee is responsible for comparing a receiving report to an invoice. Od. All employees are well supervised.
What types of controls should be in place to make sure people in the office don't just take from petty cash (for their own personal use) whenever they feel like it? In your opinion, what is an appropriate amount to have in petty cash?
The voucher system of control: Multiple Choice Establishes procedures for receiving checks for the sale of verified, approved, and recorded activities. Establishes procedures for verifying, approving, and recording liabilities for cash payment. Applies only when multiple purchases are made from the same supplier. Is a set of procedures and approvals designed to control cash receipts and the acceptance of liabilities. Is required in large companies but not beneficial for small to mid-sized companies.
3 Nolan Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure. (a) All over-the-counter receipts are entered in cash registers. (b) The duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals. (c) Daily cash counts are made by cashier department supervisors. (d) All cashiers are bonded. (e) Only cashiers may operate cash registers.
What is a appropriate control procedures that would have prevented or detected the theft of cash in a business.
Identify each of the following statements as either true or false. a. A voucher system of control improves internal control of cash pa b. Separation of duties eliminates the possibility of collusion to stea c. Good internal control is to have only one employee be assigned d. A petty cash system of control is a system used only for cash rec
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XYZ Company has considerable cash collections on a regular basis. The cashier receives the cash, records it and then banks it at the end of each day. Since a single person is responsible for access to cash, the financial director is concerned that fraud and error may occur in cash handling and recording. Suggest the financial director several internal controls to prevent such errors or misappropriations? (at least 3 controls).
Which of the following statements are true regarding the control of cash receipts and cash payments? One key to controlling cash payments is to require that no expenditures be made by check; instead, all expenditures should be made from petty cash.
Keeping cash locked away is an example of which control activity? a. Authorization b. Performance reviews • c. Physical control d. Segregation of duties
Indicate whether the following statements are true or false. A guideline for safeguarding cash is to separate the duties of those who have custody of cash from this who keep cash records. Choose... + A guideline for safeguarding cash is that all cash receipts be deposited monthly or yearly. Choose... Separation of duties eliminates the possibility of collusion to steal an asset and hide the theft from the records. Choose... + A voucher system of control is a control system exclusively for cash receipts Choose...