Which of These Is Not an Important Principle for the Control

question 27

Multiple Choice

Which of these is not an important principle for the control of cash payments?

• A) Employees who sign cheques should not accept delivery of goods.
• B) Only senior staff should have the authority to approve invoices for payment.
• C) Cheques should be written out promptly even if the invoice is not yet provided.
• D) Once the cheque is written the invoice should be stamped 'paid'.

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Definitions:

Operating Activities

Business actions directly related to the production and delivery of goods and services, affecting cash flows from operations.

Indirect Method

A cash flow statement preparation approach that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Cash Flows

The overall volume of cash inflows and outflows within a corporation, impacting its availability of liquid funds.

Free Cash Flow

A financial metric that measures the amount of cash generated by a company after accounting for capital expenditures.