Question

Assume that a company designs and implements a control procedure whereby the accountant that is responsible for recording cash receipts transactions does not have access to the cash itself. This control procedure is an example of a:
a)Detective control
b)Preventive control
c)Corrective control
d)Feedback control

Answer 1

Answer: (B) Preventive Control  

Explanation:

 According to the given question, the Preventive control is one of the type of control procedure that helps in preventing from occurring of any loss and error as it is responsible for recording all the cash receipts and the transaction in an organization.

The main objective of the preventive control is to protect all the assets and the transaction in the company. The main advantage of using this type of control procedure in the company design is to conserve the organizational's assets and also increase its life expectancy.

 Hence, the company design is implementing the preventive control process for the purpose of protecting the all the transaction. Therefore, Option (B) is correct answer.