The Most Important Internal Control Over Cash Is To

question 72

Multiple Choice

The most important internal control over cash is to:

• A)have all customers pay by check.
• B)separate cash-handling duties from cash-accounting duties.
• C)separate cash-handling from the mailroom.
• D)do none of the above.

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Definitions:

Allowance Method

An accounting technique used to account for bad debts, which estimates and sets aside a portion of accounts receivable deemed unlikely to be collected.

Uncollectible Receivables

Debts owed to a company that are considered to be uncollectable, indicating that the company does not expect to receive payment due to the debtor's inability to pay.

Percentage of Sales

A financial ratio that compares a particular expense or cost to the total sales revenue, often used to analyze cost behavior or performance.

Note Duration

The total length of time until a note payable or receivable matures and is to be repaid or collected.