Internal controls and petty cash

Question 1

What are the objectives of internal control?

Answer 1

safeguard assets of the business
accuracy and reliability of accounting data
promote operational efficiency
encourage adherence to prescribed managerial policies

Question 2

How are assets safeguarded?

Answer 2

protected of assets from loss

maintances of resources, equipment ensure efficient utilisation

Question 3

how can there be operational efficiency

Answer 3

providing products and services at minimum cost
training programs and proper supervision
use mechanical and electric equipment

Question 4

What are the 2 types of internal controls

Answer 4

accounting

administrative

Question 5

What are the principles for internal controls

Answer 5

reliable, competent personnel
responsibility
separation of duties/rotation of duties
authorisation

verification
adequate and accurate documents and records
physical controls and security

Question 6

What is verification

Answer 6

checking accuracy of records by independent means

Question 7

What is authorisation

Answer 7

validation by person of authority for action

Question 8

Organisation must fix responsibility for

Answer 8

functions to be performenced

Question 9

What are the duties that are separated

Answer 9

custodianship
recording
authroisation

Question 10

______ is required to commit a fraud if there are 2 or more people

Answer 10

collaborate

Question 11

How are records designed?

Answer 11

simple

Question 12

Documents must be arranged

Answer 12

sequentially numbered

Question 13

Recording that takes place must be

Answer 13

simultaneous

Question 14

All cash received must be banked ____ at the end of business day

Answer 14

intact

Question 15

What does banking intact mean

Answer 15

separate from other cash

Question 16

payment of money must be evidenced by

Answer 16

document or prooft

Question 17

All large payments should be made by

Answer 17

cheque

GIRO

Question 18

Cash should be kept in a

Answer 18

safe place

Question 19

at regular intervals, business records must be checked against

Answer 19

bank statement

Question 20

Who should do bank reconciliation

Answer 20

a separate person

Question 21

Why sepprate employees duties?

Answer 21

minimise errors, opportunities for fraud

Question 22

Employees who handle cash must not have access to

Answer 22

accounting records

Question 23

why rotate employees duties

Answer 23

familiarity leads to lack of vigilance

Question 24

pre-numbered receipts should be given to customers with

Answer 24

duplicate retained

Question 25

How many people should open the mail

Answer 25

2

Question 26

what is used to bring to light any cash shortages or recording errors

Answer 26

control listing

Question 27

what responsibilities should be separated in cheques?

Answer 27

signing and authorising

approving cash disbursement

Question 28

When cheque is signed, what should be stamped on supporting docs

Answer 28

paid

Question 29

who can have access to blank cheques?

Answer 29

authorised signers

Question 30

signed cheques should be immediately

Answer 30

mailed

Question 31

What is the starting entry called in setting up fund

Answer 31

petty cash advance

Question 32

What is the final entry called

Answer 32

reimbursement