Read the following statements about internal controls. Write down the numberof each statement and whether the statement is true or false. If a statement isfalse, explain why.thehysical stockta1. Internal controls are not required when payments are made by cheque.2. All payments should be made by cheque, except for petty cash payments.A good internal control procedure is where the same person is responsibleed with thee reportedfor paying all accounts, writing all cheques and signing all cheques.4. In order to be efficient, all employees should have direct access to3.and loss.petty cash.Bank reconciliation statements need only be drawn up every six months.1)diately.7. A blank cheque can be signed to replenish the petty cash fund if it ishanded to the custodian.5.6. Cheque books should be kept in a locked safe as a preventive control.9. Separation of duties is a vital part of internal control procedures.10. Any employee of a business should be able to buy assets for the business.11. Keeping personnel files in a locked filing cabinet is a corrective control.12 To save time, the employer should ask the wage earners to keep a record ofthe time worked during the week and then pay them accordingly.be1.8 All cash receipts should be stored in the cash register and deposited at theend of the week, in order to make fewer trips to the bank.14. Reconciling the cash journals with the bank statement may be classified as adetective control.13.If there is not enough money in petty cash, the custodian should takemoney from the cash register.15. The same employee should be in charge of receiving cash and paying cash.andpensive itemhese item

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Read the following statements about internal controls. Write down the number of each statement and whether the statement is true or false. If a statement is false, explain why. 1. Internal controls are not required when payments are made by cheque. 2. All payments should be made by cheque, except for petty cash payments. 3. A good internal control procedure is where the same person is responsible for paying all accounts, writing all cheques and signing all cheques. In order to be efficient, all emplo 4.

Read the following statements about internal controls. Write down the number of each statement and whether the statement is true or false. If a statement is false, explain why. 1. Internal controls are not required when payments are made by cheque. 2. All payments should be made by cheque, except for petty cash payments. 3. A good internal control procedure is where the same person is responsible for paying all accounts, writing all cheques and signing all cheques. In order to be efficient, all emplo 4.

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 are important elements of a cash disbursement control system? Note: Select all that apply. Check All That Apply All expenditures are authorized before a check is prepared. Checks are signed only by authorized Individuals. The bank-generated deposit slip should be compared with the check listing. The person opening the mall is not the person who maintains the accounting records. Unauthorized payments are prevented.
What if the drawee bank failed to determine right away that the CHECK is supposed to be dishonored and yet made payment to the holder of the CHECK, what is the remedy of the bank in this case? Can it go after the drawer or check issuer?
The primary form of prevention for most types of cash theft is: a. Creating checks and balances for handling the deposit b. Separation of duties in the receipt of cash c. The daily comparison of the receipted deposit slips to the organization’s records d. Vertical ratio analysis of sales accounts
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?
“Organizations are encouraged to take every precaution possible to protect their information systems so that potential for fraud and any resulting losses can be significantly minimized.” Required: Critically explain any three motives behind the cheque fraud scheme. What to do if someone has deposited a fake cheque into your bank account?
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.
Which internal control activity is being violated when the cashier in a retail store also records the daily receipts in a journal? adequate documents and records safeguards over assets and records independent checks on recorded amounts segregation of duties
A cash payment under a good control system will have. a. Too much amount Bank book balance b. Appointing different persons to authorize the payment and sign the cheques c. Too much amount book balance d. Maintaining minimum bank book balance
What internal control technique (s) would protect you against the hazards listed below? To hide the theft of further cash payments from that client, an employee writes down a customer's accounts receivable amount as uncollectible.
A lockbox plan is a. used to speed up the collection of checks received. b. used to protect cash, i.e., to keep it from being stolen. c. used primarily by firms where currency is used frequently in transactions, such as fast food restaurants, and less frequently by firms that receive payments as checks. d. used to identify inventory safety stocks. e. used to slow down the collection of checks our firm writes.
Which of the following reflects a weak internal control system? Please explain with full explanation. a. All employees are well supervised. b. A single employee is responsible for comparing a receiving report to an invoice. c. All employees must take their vacations. d. A single employee is responsible for collecting and recording cash.