4.7 Discuss internal controls for cash and prepare a bank reconciliation
1) Cash is one of the least vulnerable assets that a business has.
2) The cash register provides control over the cash receipts for a retail business.
3) Cash receipts should never be deposited more than once a business day.
4) Separation of duties is essential for internal control over cash receipts and cash payments.
5) Bank reconciliation is an important part of internal control that should be performed daily.
6) Streamlined payment procedures now involve the use of electronic data interchange and electronic funds transfer between and among suppliers and merchandisers.
7) In a bank reconciliation, the bank balance and the book balance must be adjusted to be reconciled.
8) Differences between when a company records a transaction and when the bank records the same transaction are called "timing" differences.
9) If possible, the bank reconciler should have no other duties relating to cash transactions in the business.
10) A bank statement shows the:
A) ending book balance as of a specific date.
B) ending bank balance as of a specific date.
C) reconciled balance as of a specific date.
D) book errors as of a specific date.
E) beginning book balance.