Choose the Proper Category of Internal Control Activities That Best

question 179

Multiple Choice

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list.
-Checks on recorded amounts

• A)One employee or department should verify the work of another.
• B)Specific approval is given by management for the performance of activities.
• C)Accounting and cash collections should be properly separated.
• D)Blank checks should be stored in a locked location.
• E)Initial entry into the accounting system should be from a consistent source with complete information.

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Definitions:

Negotiable Instrument

A document in writing that ensures a certain sum of money will be paid, whether immediately upon request or at a predetermined date, with the document specifying the individual responsible for the payment.

Particular Fund

A specific pool of money that is designated for a particular purpose or investment strategy.

Unconditional Promise

A commitment that is absolute and not subject to any conditions or contingencies.

Payable to Bearer

A designation on a financial instrument (like a check) meaning the person in possession of it can redeem it for its value.