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

Five Components of Internal Controls

Financial Accounting

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

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Multiple Choice

Which of the following is NOT an internal control activity for cash?

Limiting access to cash to authorized personnel only

Requiring bank reconciliations to be performed regularly

Segregation of duties related to cash handling

Recording cash receipts only at the end of the month

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Verified step by step guidance

Understand the concept of internal control activities for cash: Internal controls are processes and procedures designed to safeguard assets, ensure accurate financial reporting, and promote operational efficiency. For cash, these controls typically include limiting access, segregation of duties, and regular reconciliations.

Analyze the first option: 'Limiting access to cash to authorized personnel only.' This is a standard internal control activity as it helps prevent unauthorized access and potential theft or misuse of cash.

Analyze the second option: 'Requiring bank reconciliations to be performed regularly.' Regular bank reconciliations are a key internal control activity to ensure that the cash balance in the accounting records matches the bank statement, identifying discrepancies promptly.

Analyze the third option: 'Segregation of duties related to cash handling.' Segregation of duties is a fundamental internal control principle that reduces the risk of errors or fraud by ensuring that no single individual has control over all aspects of cash handling.

Analyze the fourth option: 'Recording cash receipts only at the end of the month.' This is NOT an internal control activity because delaying the recording of cash receipts increases the risk of errors, theft, or mismanagement. Proper internal controls require timely and accurate recording of transactions.