To choose: Which statement is better for company.

Question

Which one of the following statements is true? a.The person handling the cash should also prepare the bank reconciliation. b.Sound internal control practice dictates that cash disbursements should be made by check, unless the disbursement is very small. c.Petty cash can be substituted for a checking account to expedite the payment of all disbursements. d.Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account.

Answer 1

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Chapter 4, Problem 15MCQ

To determine

To choose: Which statement is better for company.

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Which one of the following statements is true? a.The person handling the cash should also prepare the bank reconciliation. b.Sound internal control practice dictates that cash disbursements should be made by check, unless the disbursement is very small. c.Petty cash can be substituted for a checking account to expedite the payment of all disbursements. d.Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account.

Which one of the following statements is true? a.Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account. b.Petty cash can be substituted for a chequing account to expedite the payment of all disbursements. c.The person handling the cash should also prepare the bank reconciliation. d.Sound internal control practice dictates that cash disbursements be made by cheque, unless the disbursement is very small.

1. Cash control systems are the methods and procedures used to ensure -- a. That current obligations are met b. That excess cash does not exists c. The safeguarding of cash d. That unused cash is invested 2. Bank reconciliation - a. Is the process of transferring money in or out of a bank account b. Requires that every transaction which will result in a cash payment be verified, approved and recorded before a bank check is prepared. c. Is an analysis that reflects the bank transactions made by the depositor d. Explains the difference between the bank balance and the balance shown in the depositor’s records 3. The journal entries for bank reconciliation - a. are taken from the balance per bank only b. may include a debit to office expense for bank service charges c. may include a credit to accounts receivable for an NSF check d. may include a debit to accounts…