Which of these is an important internal control over cash payments?Question 3Answera.stamping invoices PAIDb.paying creditors dailyc.using a cash register for all paymentsd.not making any payments out of petty cash
Question
Which of these is an important internal control over cash payments?Question 3Answera.stamping invoices PAIDb.paying creditors dailyc.using a cash register for all paymentsd.not making any payments out of petty cash
Solution
The important internal control over cash payments among the options provided is "stamping invoices PAID". This is because it provides a record that the payment has been made, reducing the risk of duplicate payments. It also provides evidence of payment for accounting and auditing purposes.
Here's a step-by-step explanation:
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Internal control over cash payments is a system designed to ensure that cash disbursements are made to the right party, in the right amount, and at the right time.
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Among the options provided, "stamping invoices PAID" is an important internal control. This is because when an invoice is stamped as "PAID", it indicates that the payment has been made.
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This reduces the risk of making duplicate payments to the same invoice.
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It also provides a record of payment. This record can be used for accounting purposes and can be reviewed during audits to ensure that payments are being made appropriately.
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The other options, such as "paying creditors daily", "using a cash register for all payments", and "not making any payments out of petty cash", may be part of a company's cash management strategy, but they do not provide the same level of control over cash payments as "stamping invoices PAID".
Similar Questions
Which of the following is not an internal control procedure for cash? Group of answer choices There should be limited access to cash. The amount of cash on hand should be kept to a minimum. Payments should be made with cash. Cash should be deposited daily.
Select all that applyGiven the choices below, choose the examples of internal controls designed to control cash payments.Multiple select question.Use of a voucher system.The person in charge of purchasing and receiving should be the only person authorized to pay.Only authorized individuals should be allowed to sign checks.Use of a petty cash system.All payments should be made by check.
Which of the following is a suggested procedure to establish internal control over cash disbursements?Select answer from the options belowApproval and payment should be made by a single individual only.Any employee should be able to sign the cheques.Blank cheques should be stored with limited access.The bank statement should be reconciled annually.
Select all that applyIdentify the basic internal control guidelines which should be in place to protect a business's cash by selecting the correct answers below.Multiple select question.Excess cash should be left in the bank to maintain liquidity.Bills should be paid immediately.Handling cash is separate from recordkeeping of cash.Cash receipts are promptly deposited in a bank.Cash payments are made by check.
To maintain control of cash payments, all payments should be made by check exceptMultiple choice question.large payments made by petty cashemployee paychecks made by cashsmall payments made by petty cashpurchases of equipment made by cash
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