BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When customers pay using checks or money orders
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When new employees are being trained to handle cash
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When cash is being received or disbursed
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When cash is in the form of bills and coins
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Detailed explanation-1: -The objectives of internal controls for cash disbursements are to ensure that cash is disbursed only upon proper authorization of management, for valid business purposes, and that all disbursements are properly recorded. Grantees will find this resource useful when maintaining internal control for cash disbursements.
Detailed explanation-2: -Cash controls are internal systems used to prevent unapproved payments, theft, and fraud. These systems include procedures at predefined steps to create segmentation of duties and introduce checks in the process to identify and correct errors.
Detailed explanation-3: -Two of the most important controls are segregation of duties and check signing/EFT approval procedures. Controls over these two steps in the cash disbursement cycle minimize the risk of fraud. The steps are simple and, for the most part, easy to implement.