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.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 31CYBK

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There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records? A. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments.
Which of the following does not explain the differences between the bank statement balance and the customers cash balance? a. Deposit in transit b. Canceled checks c. An NSF check d. Errors e. Interest income
A bank reconciliation takes time and must balance. An employee was struggling in balancing the bank reconciliation. Her supervisor told her to plug (make an unsupported entry for) the difference, record to Miscellaneous Expense, and simply move on. Discuss the internal controls problem with this directive.
Match the following words with their definitions by entering the correct number in the spaces below. 1.deposit ticket 2.ATM 3.check 4.bank statement 5.blank endorsement _____ a.A document ordering a bank to pay cash from a depositors account. _____ b.An endorsement where the payee simply signs the back of the check, making the check payable to any bearer. _____ c.Automated teller machinea machine used by depositors to make withdrawals or deposits at any time. _____ d.A statement of account issued by a bank to each depositor once a month. _____ e.A form showing a detailed listing of items being deposited.