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

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

Which of the following is NOT a proper segregation of duties for cash received in person?

The same employee both receives cash and records it in the accounting system.

Cash receipts are deposited by someone other than the person who records them.

The employee who receives cash does not have access to the accounting records.

One employee receives cash while another records the transaction.

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Verified step by step guidance

Understand the concept of segregation of duties: Segregation of duties is a key internal control principle that ensures no single individual has control over all aspects of a financial transaction. This reduces the risk of errors and fraud.

Analyze the options provided: Review each option to determine whether it adheres to the principle of segregation of duties. Look for any overlap in responsibilities that could compromise internal controls.

Evaluate the first option: 'The same employee both receives cash and records it in the accounting system.' This violates segregation of duties because one person is handling both the receipt and recording of cash, which increases the risk of fraud or error.

Assess the second option: 'Cash receipts are deposited by someone other than the person who records them.' This adheres to segregation of duties because the responsibilities are divided between two individuals.

Review the remaining options: 'The employee who receives cash does not have access to the accounting records' and 'One employee receives cash while another records the transaction.' Both of these options align with proper segregation of duties, as they separate the tasks of receiving and recording cash.