Accounting Fundamentals: Cash Controls

What is cash in the form of?

• Coins and bills

• Checks

• Credit cards

• Digital currency

Cash equivalents are assets that can be turned into cash in a short period of time. Which of the following is an example of a cash equivalent?

• Treasury bills

• Long-term bonds

• Real estate

• Stocks

Fill in the blank: Cash controls help to prevent ______ and fraud.

• Theft

• Errors

• Loss

• Waste

What is the purpose of bank account access as a cash control?

• To limit who can access company funds

• To increase employee borrowing

• To prevent theft

• To ensure monthly statements are sent.

In a dual control process, how many people are required to complete a transaction?

• One

• Two

• Three

• Four

What is a key aspect of the Security of Check Stock process?

• Checks are signed by one person

• Check stock is stored in a secure environment

• Signature plates are accessible to all employees

• Checks are not signed at all.

In the Bank Reconciliation Process, which step involves comparing the adjusted balances?

• Adjusting the balance per bank

• Adjusting the balance per books

• Comparing the adjusted balances

• Preparing and posting journal entries.

What is a deposit in transit?

• Cash received and recorded by the company but not yet recorded by the bank

• Cash recorded by the bank but not yet received by the company

• Cash received and recorded by both the company and the bank

• Cash not recorded by either the company or the bank.

An outstanding check is a check that has been recorded in the company's cash account but not yet ______ by the bank.

• Cleared

• Deposited

• Withdrawn

• Balanced

What should occur after the bank and book balances are adjusted?

• The balances should be equal

• The balances should be different

• The process should not be repeated

• The balance is not equal to the amount of cash present.