What is an internal control?

• The internal control of a business involves the practices a business uses in the day to day operation such as inventory management, asset management, human resource management and cash management.

• The internal control of a business involves the internal measures and methods that ensure efficient management of the business and achievement of planned objectives.

• The internal control of a business involves the external measures and methods that ensure efficient management of the business and achievement of planned objectives.

• The internal control of a business involves the internal measures and methods to ensure good business practices.

Which of the following is not an internal control over cash?

• Separation of duties.

• All cash received should be banked at the end of each business day.

• Cash should be kept in a top draw in the manager’s office.

• Rotation of duties.

• Business records should be checked against a bank reconciliation.

Effective management of cash includes:

• Ensuring appropriate controls are implemented.

• Preparing cash budgets.

• Investing excess cash to maximise revenue.

• None of the above.

• All of the above.

What are the three (3) main sources of cash in a business?

• i. Cash sales, ii. Credit Sales, and iii. cash received from accounts receivable

• i. Cash sales, ii. Cash Sales – bank credit/debit cards, and iii. cash received from accounts receivable

• i. Lay-Buys, ii. Cash Sales – bank credit/debit cards, and iii. cash received from accounts receivable

• i. Cash sales, ii. Cash Sales – bank credit/debit cards, and iii. cash received from petty cash

Cash is the most common form of payment in Australia.

• True

• False

Which one of the following source documents is not used in conjunction with the receipt of money?

• receipts

• credit card voucher

• bank statement

• invoice

• cash register summary

Internal controls over a Cash Payments system would have which of the following

• Evidence

• Proper authorisation

• Regular bank reconciliation

• Cheques or company credit card

• All of the above

The normal method used for controlling and recording petty cash is called a what?

• Cash received statement

• Cash journal

• Cash system

• Imprest system

How often would you balance the Petty Cash Book?

• Everyday

• Once a week

• At the end of the month

• At the end of the financial year

Only for the receipt of physical cash, a record must be kept to substantiate the receipt of the money in a business.

• True

• False