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Financial & Managerial Accounting
Found in: Page 305
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

A good system of internal control for cash provides adequate procedures for protecting both cash receipts and cash disbursements. Identify each of the following statements as either true or false regarding this protection.

c. A basic guideline for safeguarding cash is to separate the duties of those who have custody of cash from those who keep cash records.

Answer

The statement is a True statement.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Meaning of Internal Control

Internal controls are the systems, rules, and methodology carried out by an organization to guarantee the uprightness of financial and bookkeeping data, promote accountability, and help in preventing fraud.

Step 2: Explanation of above statement

True

Due to the separation of duties, the risk is minimized regarding fraud, error, and theft because an individual's work is considered an act that another individual will check.

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