A Primary Purpose of the Proof of Cash Is to

question 25

Multiple Choice

A primary purpose of the proof of cash is to

• A) Prevent fraud.
• B) Reconcile actual cash receipts and disbursements to budgeted receipts and disbursements.
• C) Investigate variances from expected cash balances.
• D) Ensure that all cash receipts recorded in the cash receipts journal were deposited in the bank account.

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Definitions:

Product Costs

Product costs are the costs directly associated with the production of goods, including material, labor, and manufacturing overhead expenses.

Sales and Administrative Expenses

Expenses related to the selling of products and the administration of a business, not directly tied to the production process.

Not a Product Cost

An expense that is not directly associated with manufacturing or producing a product, typically including selling, general, and administrative expenses.

Maintenance Supplies

Consumable items used in the regular upkeep of equipment, machinery, or property.