Which Statement Regarding Internal Control Is false

question 152

Multiple Choice

Which statement regarding internal control is false?

• A) Documentation is not a critical component of an internal control system.
• B) Ideally, a task can be divided to make job functions as natural checks on each other.
• C) A specific person should ideally be responsible for each task or job function.
• D) All records should allow cross-referencing from one area of responsibility to another.

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Definitions:

Outstanding Checks

Outstanding checks are checks that have been written and recorded in the payor's ledger but have not yet been cashed or cleared by the bank.

Deposits In Transit

Bank deposits that have been made but not yet credited to the business's bank account, typically appearing on a bank reconciliation statement.

Service Charges

Fees imposed by a company for the provision of a service, often applied in banking, brokerage, and hospitality industries.

NSF Check

A check that cannot be processed due to insufficient funds in the account it is drawn against, known as a "Non-Sufficient Funds" check.