Match the Internal Control Principle Below with the Appropriate Cash

question 112

Short Answer

Match the internal control principle below with the appropriate cash receipts procedure described.
a. Documentation procedures
b. Establishment of responsibility
c. Independent internal verification
d. Human resource controls
e. Physical controls
f. Segregation of duties
_____ 1. Only designated personnel are authorized to handle cash receipts.
_____ 2. Different individuals receive cash and record cash receipts.
_____ 3. Use remittance advice and cash register tapes.
_____ 4. Store cash in safes and bank vaults.
_____ 5. Treasurer compares total receipts to bank deposits daily.
_____ 6. Bonding of employees that handle cash.
SO: 3, Bloom: C, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Resource Management, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Internal Controls
Solution 174 (5 min.)

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Definitions:

Negative Earnings Surprise

An event where a company's reported earnings are below the expectations of analysts, often leading to a decline in its stock price.

Stock Returns

The income generated from the investment in shares, comprised of dividends received and capital gains or losses.

Exit Price Approach

A valuation method that determines the price a seller would receive to sell an asset or transferred liability.

Transaction Costs

The expenses associated with buying or selling goods, services, or financial instruments, which may include commissions, fees, and bid-ask spreads.