Which of the following internal controls is the most effective in preventing employees from using company funds to purchase personal items? A. Adequate separation of duties between the cash receipts and the recording of cash receipts. B. Cash reconciliations are performed daily. C. The purchase requisition forms are required for all purchases and the warehouse staff check the deliveries against the approved purchase requisition forms to make sure the delivered items match the pre-approved orders. D. Cash payments need to be approved based on supporting documents, such as purchase orders and receiving reports. E. purchase requisition forms are pre-numbered, and their sequence is accounted for.
Which of the following internal controls is the most effective in preventing employees from using company funds to purchase personal items? A. Adequate separation of duties between the cash receipts and the recording of cash receipts. B. Cash reconciliations are performed daily. C. The purchase requisition forms are required for all purchases and the warehouse staff check the deliveries against the approved purchase requisition forms to make sure the delivered items match the pre-approved orders. D. Cash payments need to be approved based on supporting documents, such as purchase orders and receiving reports. E. purchase requisition forms are pre-numbered, and their sequence is accounted for.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following internal controls is the most effective in preventing employees from using company funds to purchase personal items?
| A. |
Adequate separation of duties between the cash receipts and the recording of cash receipts. |
|
| B. |
Cash reconciliations are performed daily. |
|
| C. |
The purchase requisition forms are required for all purchases and the warehouse staff check the deliveries against the approved purchase requisition forms to make sure the delivered items match the pre-approved orders. |
|
| D. |
Cash payments need to be approved based on supporting documents, such as purchase orders and receiving reports. |
|
| E. |
purchase requisition forms are pre-numbered, and their sequence is accounted for. |
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