Question

TRUE/FALSE. Write T if the statement is true and F' if the statement is false.

1) Internal control is an organizational plan that ensures that the financial statements are prepared and submitted on time.
2) It is important for a business to identify policies which ensure that all customers are treated similarly and that results can be measured effectively.
3) All cash receipts should be deposited in the bank at the end of each week.
4) Companies receive cash either over the counter, through the mail, or by electronic funds transfer.
5) The security measures are the same for any type of cash receipts
6) A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.
7) For good internal control over cash payments, the company officer approving a payment voucher should be the same as the person who ordered the goods. This ensures that the correct amount of cash is paid.

Answer 1

1) False

2) True

3) False

4) True

5) False

6) True

7) False

Step-by-step explanation:

The internal controls has multiple outcomes. It does not only ensures that financial statements are prepared according to the applicable standard but also ensures to prevent fraud in the organization.

Business should focus on their customers and treat them fairly.

It is not mandatory to deposit all the cash receipt in the bank every week.

Security measures vary from business depending on their risk nature.

Sound internal controls require segregation of duties. The person who is ordering the goods should be different from the one who is making the payment to avoid chances of fraud.