Listed Below Are Examples of Several Internal Control Procedures

question 116

Essay

Listed below are examples of several internal control procedures.
Required: For the following internal control procedures,give the objective of the control:
a.The stock of unused checks is kept under lock and key.
b."Surprise" counts of cash funds are conducted periodically.
c.All purchases must be made by the purchasing department.
d.The accounting department matches invoices to copies of purchase orders.

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Definitions:

Time Value

The idea that money currently in hand is more valuable than an identical sum received later, because of its ability to earn more over time.

Relevant Cash Flow

Cash flows that will occur as a direct result of a decision made by a business, essential in capital budgeting and investment analysis.

Interest Expense

The cost incurred by an entity for borrowed funds, often a significant component of its operating costs.

Initial Cost

The total expense incurred to acquire an asset, including the purchase price and any other costs necessary to get the asset ready for use.