Why is it a matter of good internal control to deposit all cash receipts daily and make all payments for goods and services by check?
A)When no paper documents are required,there is increased convenience and lower cost
B)These actions control the access to cash and create an independent record of all cash activities.
C)These procedures result in a more extensive testing of a company's records.
D)The Sarbanes-Oxley Act requires these steps be taken by each publicly traded company.
E)These procedures allow management to determine if projected cash receipts and disbursements came in over or under budgeted amounts.

Question

Quizplus · Accepted Answer

Depositing cash receipts daily and making payments by check helps to control access to cash and creates a record of all cash activities, which is an important aspect of good internal control. This helps to prevent fraud, errors, and misappropriation of funds. The other options are not directly related to internal control.

Why Is It a Matter of Good Internal Control to Deposit