Petty Cash Quiz

Physical controls do not include:

• Independent bank reconciliation

• Bank safety deposit boxes for important papers

• Locked warehouses for inventories

• Safes and vaults to store cash

Permitting only designated personnel to handle cash receipts is an application of the principle of:

• Human resource controls

• Segregation of duties

• Establishment of responsibility

• Independent internal verification

A company writes a check to replenish a $115 petty cash fund when the fund contains receipts of $105 and $6 in cash. In recording the check, the company should:

• Debit Petty cash for $105

• Credit cash for $105

• Debit cash over and short for $4

• Credit cash over and short for $6

Which of the following is not an element of the fraud triangle?

• Opportunity

• Financial pressure

• Rationalization

• Uncontrollable desires

An organization uses internal control to enhance the accuracy and reliability of accounting records and to:

• Deter employee dishonesty

• Safeguards assets

• Prevent fraud

• Produce correct financial statements