Question

Listed below are 12 various procedures in a business with respect to cash receipts and payments.

From the list below place the number of the control activity in the space beside the corresponding procedure in the business. (Some control activities will be used more than once.) The first has been completed for you. Installing an alarm system is an example of a good “Physical Control”, so it supports physical controls, which is number 4.

CONTROL ACTIVITIES:

1. Supports Assignment of Responsibility         6. Violates Assignment of Responsibility
2. Supports Segregation of Duties                      7. Violates Segregation of Duties
3. Supports Documentation                                8. Violates Documentation
4. Supports Physical Controls                            9. Violates Physical Controls
5. Supports Review and Reconciliation             10. Violates Review and Reconciliation

Question 1 options:

12345678910 If an employee wants to be reimbursed for money they spent on behalf of the company, they must provide receipts to prove the correct amounts. 12345678910 Store cash in safes and bank vaults with limited access. 12345678910 Donovan Inc. does not believe in doing physical inventory counts as they use a perpetual inventory system. 12345678910 The company cheques are not pre-numbered. The accounts payable clerk manually writes in the cheque number when filling out the cheques. 12345678910 Have different individuals recording cash receipts and handling cash. 12345678910 Morstan Corporation doesn’t have enough cash sales to justify going to the bank for a deposit every day. They put the cash payments in a cash drawer. 12345678910 Authorize only designated personnel to sign cheques or approve electronic payments. 12345678910 Jim Moriarty orders merchandise, receives the inventory and authorizes payment for the merchandise. 12345678910 Use cash registers to record transactions. 12345678910 Require employees to wear a badge with their photo identification prior to entering the office. 12345678910 There are three sales clerks working at all times and they share the same cash drawer. 12345678910 Mycroft, the internal auditor, surprises the accounting department by randomly arriving at the office to audit processes and accounts.

1. Supports Assignment of Responsibility 2. Supports Segregation of Duties 3. Supports Documentation 4. Supports Physical Controls 5. Supports Review and Reconciliation 6. Violates Assignment of Responsibility 7. Violates Segregation of Duties 8. Violates Documentation 9. Violates Physical Controls 10. Violates Review and Reconciliation

Answer 1

Control Activities are listed below: