At Cadmia Services,the junior accountant collects checks and cash from customers and records the transactions in the journal.The controller approves the journal entries and bank reconciliations.The treasurer signs checks and approves contracts. Which internal control procedure is exemplified in the above situation?
A)assignment of responsibilities
B)competent,reliable,and ethical personnel
C)separation of duties
D)documents

Question

Quizplus · Accepted Answer

The internal control procedure exemplified in the above situation is separation of duties, which involves dividing tasks among different employees to ensure that no one person has too much control over a transaction. The junior accountant collects checks and cash, records the transactions in the journal, and the controller approves the journal entries and bank reconciliations, which ensures that there is a check and balance in place. The treasurer signs checks and approves contracts, which is another example of separating duties to reduce the risk of fraud or errors.

At Cadmia Services,the Junior Accountant Collects Checks and Cash from Customers