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

All of the following are examples of controls of cash except:

Allowing one employee to both authorize and record cash transactions

Segregation of duties between cash handling and recordkeeping

Requiring daily deposits of cash receipts

Performing regular bank reconciliations

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Verified step by step guidance

Understand the concept of internal controls over cash: Internal controls are procedures and policies implemented by a company to safeguard its assets, ensure accurate financial reporting, and promote operational efficiency. In the context of cash, these controls are designed to prevent theft, fraud, and errors.

Review the examples provided in the question: Each option represents a potential control or lack thereof. Analyze each option to determine whether it aligns with the principles of effective internal controls.

Evaluate the principle of segregation of duties: Segregation of duties is a key internal control that ensures no single employee has control over all aspects of a financial transaction. This reduces the risk of fraud or errors. For example, separating cash handling from recordkeeping is a strong control measure.

Assess the requirement for daily deposits of cash receipts: Requiring daily deposits ensures that cash is promptly accounted for and reduces the risk of theft or misplacement. This is an example of a good internal control.

Identify the exception: Allowing one employee to both authorize and record cash transactions violates the principle of segregation of duties and increases the risk of fraud or errors. This is not an example of a control of cash, making it the correct answer to the question.