Question

Which of the following is an internal control procedure used to safeguard a company's assets? Multiple Choice Timely deposits of cash receipts into a checking account Separation of duties Reconciliation of the bank statement All of these answer choices are correc

Answer 1

Answer:

All of these answer choices are correct

Explanation:

All of the answer choices are correct in relation to an internal control procedure used to safeguard a company's assets

1.Timely deposits of cash receipts into a checking account

Daily deposits of all cash receipts to produce a timely independent record of the cash received. It also reduces the likelihood of cash theft and the risk that an employee could personally use the money before depositing it.

2.Separation of duties

Generally in business and accounting, segregation of duties serves two key purposes. These purposes include assurance that you are able to review and catch errors easily if there is an oversight and it also prevents theft and fraud.

3.Reconciliation of the bank statement

Reconciliation is a fundamental accounting process that ensures the actual money spent matches the money leaving an account at the end of a period. This is important for businesses to inspect fraudulent activity and to prevent financial statement errors.

Answer 2

Answer:

All of these answer choices are correct

Explanation:

Timely deposits of cash receipts into a checking account is an internal control process that mitigates against the risk of theft or misappropriation of cash (an asset).

Separation of duties is a basic principle of internal controls that ensures that a transaction is not initiated, reviewed, approved and recorded by a single person. This mitigates against the risk of fraud ( including misappropriation of assets) and error.

Reconciliation of the bank statement is also an internal control measure that prevents or corrects the omissions and erroneous postings into the cash/bank ledger.