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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes the concept of separation of duties as a component of internal control?

Allowing one employee to handle all accounting functions to increase efficiency.

Assigning all financial reporting tasks to external auditors.

Dividing responsibilities among different employees so that no single individual controls all aspects of a transaction.

Requiring management approval for all transactions, regardless of size.

Previous problemNext problem

Verified step by step guidance

Understand the concept of 'separation of duties' as a key component of internal control. It refers to dividing responsibilities among different employees to prevent fraud, errors, and ensure checks and balances.

Analyze the options provided in the problem. The goal is to identify the option that aligns with the definition of separation of duties.

Option 1: 'Allowing one employee to handle all accounting functions to increase efficiency' contradicts the principle of separation of duties, as it centralizes control and increases risk.

Option 2: 'Assigning all financial reporting tasks to external auditors' is not related to separation of duties within an organization but rather outsourcing tasks, which is a different concept.

Option 4: 'Requiring management approval for all transactions, regardless of size' focuses on authorization rather than dividing responsibilities, making it unrelated to separation of duties. Therefore, the correct answer is Option 3: 'Dividing responsibilities among different employees so that no single individual controls all aspects of a transaction.'