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 a proper control for over-the-counter cash receipts?

Permitting only one employee to count and deposit cash at the end of the shift

Using a cash register that prints a receipt for each transaction

Storing cash in an unlocked drawer until the end of the day

Allowing employees to handle cash and record transactions without supervision

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Verified step by step guidance

Understand the concept of internal controls: Internal controls are procedures and mechanisms designed to safeguard assets, ensure accurate financial reporting, and promote operational efficiency. In the context of cash receipts, controls help prevent theft, fraud, and errors.

Evaluate the options provided: Review each option to determine whether it aligns with the principles of effective internal controls. Effective controls typically involve segregation of duties, physical safeguards, and proper documentation.

Analyze the first option: Permitting only one employee to count and deposit cash at the end of the shift does not align with segregation of duties, which is a key principle of internal controls. This option increases the risk of theft or errors.

Analyze the second option: Using a cash register that prints a receipt for each transaction is a proper control. It provides documentation for each transaction, ensures accountability, and reduces the risk of errors or fraud.

Analyze the remaining options: Storing cash in an unlocked drawer until the end of the day lacks physical safeguards and increases the risk of theft. Allowing employees to handle cash and record transactions without supervision violates the principle of oversight and segregation of duties.