To Maintain Effective Internal Control, Employees Responsible for Handling Cash

question 7

True/False

To maintain effective internal control, employees responsible for handling cash should have access to the accounting records.

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Definitions:

Excess Reserves

The funds that banks hold over and above the legally mandated minimum to safeguard bank liquidity, which can also be lent out.

Actual Reserves

The funds that a bank has on hand or deposited with the central bank, available for immediate use.

Net Worth

Assets minus liabilities; also called owners’ equity.

Owners' Equity

The residual interest in the assets of a business after deducting its liabilities, representing the ownership interest of shareholders or proprietors.