Which of the Following Demonstrates a Poor Internal Control Procedure

question 105

Multiple Choice

Which of the following demonstrates a poor internal control procedure?

• A)The bookkeeper makes cash deposits and records journal entries related to cash,while the treasurer prepares the bank reconciliation.
• B)The president,who does no bookkeeping,prepares the bank reconciliation each month.
• C)The treasurer signs all checks after the bookkeeper prepares the supporting documents.
• D)One bookkeeper prepares cash deposits and the other bookkeeper enters the collections in the journal and ledger.

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Definitions:

Authority

The ability or entitlement to dictate actions, decide on matters, and demand adherence.

Decision

The act of making a choice or coming to a conclusion.

Investment Turnover

A financial ratio that measures how effectively a company uses its assets to generate sales revenue; a higher turnover indicates better performance.

Profit Margin

The ratio of net income to revenue, indicating how much profit is generated per dollar of sales.