Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

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Multiple Choice

A cash register that typically holds about $150 currently has $500 in it. What would be the most appropriate action to take?

Leave the cash in the register until the end of the month.

Ignore the excess cash, as it is not a significant concern.

Remove the excess cash and deposit it in the bank to reduce the risk of theft.

Use the extra cash to pay for minor business expenses directly from the register.

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Verified step by step guidance

Understand the concept of internal controls in financial accounting, which includes safeguarding assets such as cash to prevent theft or misuse.

Recognize that excess cash in a register increases the risk of theft and is not a recommended practice for maintaining proper internal controls.

Evaluate the options provided in the problem and identify the most appropriate action based on financial accounting principles. The goal is to minimize risk and ensure proper handling of cash.

Determine that the best course of action is to remove the excess cash from the register and deposit it in the bank. This action aligns with internal control practices and reduces the risk of theft.

Conclude that using the extra cash for minor business expenses or ignoring the excess cash are not appropriate actions, as they do not align with safeguarding assets or maintaining accurate financial records.