Which of the Following Procedures Would Weaken Control Over Cash

question 164

Multiple Choice

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

• A) After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent.
• B) The bank reconciliation is prepared by a person who does not handle cash or record cash receipts.
• C) For safety, only one person should open the mail, and that person should immediately deposit the cash received in the bank.
• D) The cashier should not also be the record keeper who records the amounts received in the accounting records.
• E) All of these are good internal control procedures over cash receipts that arrive through the mail.

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Definitions:

Accounts Payable

The amount of money that a company owes to its suppliers or vendors for goods and services received but not yet paid for.

Internal Audit

A department within an organization tasked with evaluating and improving the effectiveness of risk management, control, and governance processes.

Approved Vendor List

A list of suppliers that a company has vetted and approved for purchasing specific goods or services.

Bona Fide Claim

A claim that is made in good faith without deception or fraud.