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 would NOT represent good controls over cash disbursements?

Requiring dual signatures on checks above a certain amount

Using pre-numbered checks for all disbursements

Allowing the same employee to both authorize and record cash disbursements

Reconciling bank statements monthly by someone independent of cash handling

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Verified step by step guidance

Understand the concept of internal controls over cash disbursements. Internal controls are procedures and policies designed to safeguard assets, ensure accurate financial reporting, and prevent fraud or errors.

Review each option provided in the problem to determine whether it represents a good control over cash disbursements. Good controls typically involve segregation of duties, authorization procedures, and independent verification.

Analyze the first option: 'Requiring dual signatures on checks above a certain amount.' This is a good control because it ensures that large disbursements are authorized by more than one person, reducing the risk of fraud or error.

Evaluate the second option: 'Using pre-numbered checks for all disbursements.' This is also a good control because it helps track all checks issued and prevents unauthorized or missing checks.

Examine the third option: 'Allowing the same employee to both authorize and record cash disbursements.' This is NOT a good control because it violates the principle of segregation of duties, increasing the risk of fraud or errors. Proper controls require that authorization and recording be handled by separate individuals.