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?

Depositing all cash receipts daily

Recording cash receipts in the sales journal only at year-end

Performing regular bank reconciliations

Requiring two signatures on checks

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Verified step by step guidance

Understand the concept of internal control activities for cash. Internal controls are procedures and policies implemented by a company to safeguard assets, ensure accurate financial reporting, and promote operational efficiency.

Review each option provided in the problem and evaluate whether it aligns with the principles of internal control for cash. Internal controls typically include timely recording of transactions, segregation of duties, regular reconciliations, and authorization procedures.

Option 1: Depositing all cash receipts daily. This is a strong internal control activity because it ensures cash is promptly secured and reduces the risk of theft or mismanagement.

Option 3: Performing regular bank reconciliations. This is another effective internal control activity as it helps identify discrepancies between the company's records and the bank's records, ensuring accuracy and detecting potential fraud.

Option 4: Requiring two signatures on checks. This is a segregation of duties measure, which is a key internal control activity to prevent unauthorized transactions. Compare these to Option 2: Recording cash receipts in the sales journal only at year-end, which delays recording and increases the risk of errors or fraud, making it NOT an internal control activity.