3. Explain the applications of internal control principles to cash receipts. 4. Explain the applications of internal control principles to cash disbursements 5. Describe the operation of a petty cash fund. 6. Indicate the control features of a bank account. 7. Prepare a bank reconciliation 8. Explain the reporting of cash.
TRUE-FALSE STATEMENTS 1.
Internal control is mainly concerned with the amount of authority a supervisor exercises over a subordinate.
2.
A highly automated computerized system of accounting eliminates the need for internal control.
3.
The safeguarding of assets is an objective of a company's system of internal control.
4.
Management is responsible for establishing a system of internal control.
5.
Internal control is most effective when several people are responsible for a given task.
6.
The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.
7.
Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency.
8.
The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit.