Question

In the cash receipts process, the control plan of immediately endorsing incoming checks is designed to achieve the control goal of:

a. ensure the timely deposit of cash receipts
b. ensure security of the cash asset
c. ensure cash receipts input accuracy
d. ensure cash receipts input completeness

Answer 1

The immediate endorsement of incoming checks in the cash receipts process is aimed at securing the cash asset by restricting their use to the company, thus preventing theft or misappropriation.

Step-by-step explanation:

The control plan of immediately endorsing incoming checks within the cash receipts process is primarily designed to achieve the control goal of ensuring the security of the cash asset.

By endorsing the checks upon receipt, a company can effectively restrict their use, meaning that they can only be deposited or negotiated by the company itself, hence reducing the risk of theft or misappropriation. This control mitigates the risk of cash assets being mishandled or diverted prior to their deposit into a bank account.