Which of the Following Controls Over Cash Would an Auditor

question 29

Multiple Choice

Which of the following controls over cash would an auditor expect to observe?

• A)Reconciliation of the general ledger to the subsidiary ledger.
• B)Checks permanently marked "for deposit only" with the proper routing information.
• C)Internal audits of marketable securities held in the company's lockbox.
• D)Authorization privileges given only to those employees using the accounting system.

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Definitions:

Risk Of Loss

A legal and contractual concept determining which party bears the risk for damage or loss of goods after a sale has been completed but before delivery is made.

Contract Price

The total agreed-upon amount for services or goods detailed within a contract.

Commercial Impracticability

A doctrine allowing parties to suspend or terminate contractual obligations when unexpected events fundamentally alter the nature of the contract, making performance unfeasible.

Increased Production Costs

A scenario where the expenses associated with producing goods or services rise, potentially affecting prices and profitability.