Which Statement About Internal Controls Over Cash Is Correct

question 112

Multiple Choice

Which statement about internal controls over cash is correct?

• A)A bank reconciliation is the only control required for cash.
• B)A bank reconciliation is designed for detection of problems after the fact.
• C)A bank reconciliation is a tool to investigate employee fraud.
• D)A bank reconciliation is designed to prevent problems from happening.

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Definitions:

Open Account

a method of credit where the seller ships goods or provides services to a buyer under an agreement to bill them later or on a recurring basis.

Assets

Resources owned by a business, expected to bring future economic benefits.

Liabilities

Debts or financial responsibilities that a business has to other entities, requiring repayment over a period through the exchange of economic resources such as cash, products, or services.