Important Elements of an Internal Control System for Cash Disbursements

question 132

Multiple Choice

Important elements of an internal control system for cash disbursements include each of the following except:

• A) Only authorized personnel should sign checks.
• B) All expenditures should be authorized before a check is prepared.
• C) All disbursements, other than very small disbursements, should be made by check.
• D) The same person that prepares the check should also record it in the proper journal.

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Definitions:

Variable Rate

An interest rate that can change over the period of a loan or mortgage based on underlying benchmark interest rates or indices.

Financial Risk Management

The method of safeguarding a company's economic value through the utilization of financial tools to control exposure to risks, notably market risk and credit risk.

Risk Profiles

Descriptions of an individual's or organization's willingness to take risks, as well as the threats to which they are exposed.

Risk Profile

A risk profile assesses the willingness and ability of an individual or entity to take risks, often used in financial planning to tailor investment strategies.