Sound Internal Control Dictates That, Immediately Upon Receiving Checks from Customers

question 716

Multiple Choice

Sound internal control dictates that, immediately upon receiving checks from customers by mail, a responsible employee should:

• A) Add the checks to the daily cash summary.
• B) Verify that each check is supported by a prenumbered sales invoice.
• C) Prepare a duplicate listing of checks received.
• D) Record the checks in the cash receipts journal.

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Definitions:

Journalizing

The process of recording transactions in a company's journal, detailing the financial activities and their impact on accounts.

Ledger

A collection of accounts in which the transactions of a business are categorized and recorded, serving as the main accounting record.

Account

A record that keeps track of financial transactions of a specific type or for a specific purpose within an organization.

General Ledger

A comprehensive record of all financial transactions that occur within a company, serving as the primary data source for the financial statements.