Chapter wise question collection of financial accounting
CHAPTER 6 INTERNAL CONTROL SYSTEMS, CASH, AND RECEIVABLES Questions 1. It is true that cash is often a small item in the balance sheets of most organisations. The reason control of cash is regarded as an important part of an internal control system is that being the most liquid asset, cash is more prone to embezzlements, thefts, frauds and defalcations than other assets. 2. Certificates of deposits are not classified as cash because they are not accepted by banks for deposit into the account of a customer as cash. 3. Accounting controls are designed to provide reasonable assurance that all transactions are authorised by management and promptly and properly recorded and that access to assets is permitted in accordance with management's authorisation. Administrative controls are concerned mainly with operational efficiency and adherence to management policies. 4. A feature of a good internal control system is that record‑keepi