Which of the Following Is not an Internal Control Activity

question 105

Multiple Choice

Which of the following is not an internal control activity for cash?

• A)The number of persons who have access to cash should be limited.
• B)The functions of record keeping and maintaining custody of cash should be combined.
• C)Surprise audits of cash on hand should be made occasionally.
• D)All cash receipts should be recorded promptly.

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Definitions:

Initial Value Method

An accounting approach where investments are recorded at their purchase cost without subsequent adjustment for market changes.

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after eliminating the effects of intercompany transactions.

Investment Account

An account held at a financial institution that holds securities, stocks, bonds, and other investment assets.

Intangible Asset

Assets that are not physical in nature, including goodwill, software, and licensing agreements, valuable to a company's operations.