A Critical Element of Internal Control Over Collections of Accounts

question 86

Multiple Choice

A critical element of internal control over collections of accounts receivables is:

• A) depositing the cash from the cash register on a daily basis
• B) setting up a petty cash account
• C) using a cheque writing machine
• D) the separation of cash-handling and cash-accounting duties

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Definitions:

Future Goods

Goods that are not currently in existence but are expected to be produced or acquired by the seller in the future.

Insurable Interest

A requirement that the person purchasing insurance has a legitimate interest in the preservation of the life or property insured, ensuring they will suffer financial loss if the insured event occurs.

Buyers

Individuals or entities that procure goods or services in exchange for payment.

Security Interest

A legal claim or right granted over assets to secure the performance of an obligation or the payment of a debt.