Asked by Kwama Kenyatta on Jun 26, 2024
Verified
Which of the following is not a good control activity over cash?
A) Payments to creditors should be made in cash.
B) There should be limited access to cash.
C) The amount of cash on hand should be kept at a minimum.
D) Cash should be deposited daily.
Control Activity Over Cash
Practices and procedures implemented to manage and safeguard cash transactions and prevent fraud.
Payments To Creditors
It refers to the amounts of money a company owes to its suppliers or service providers and plans to pay back.
Limited Access
Limited access refers to restrictions placed on the availability or use of resources, data, or areas, often for security, privacy, or regulatory reasons.
- Identify the categorization and management of cash and cash equivalents within financial statements.
- Outline the differences in duties and roles present in an internal control mechanism for thwarting and spotting fraud.
Verified Answer
MP
Michaela PorterJul 01, 2024
Final Answer :
A
Explanation :
Payments to creditors should generally not be made in cash because it does not provide an adequate audit trail, increases the risk of theft, and is harder to reconcile with accounting records. Other options enhance control over cash by limiting access, minimizing the amount on hand, and ensuring cash is deposited promptly.
Learning Objectives
- Identify the categorization and management of cash and cash equivalents within financial statements.
- Outline the differences in duties and roles present in an internal control mechanism for thwarting and spotting fraud.