1.Which of the following describes a scenario that represents good internal controls?

A. The person responsible for handling cash is a different person than the one who records cash amounts in the ledgers.

B. The person who reconciles the bank statement is the same person who is responsible for issuing checks.

C. The person who receives and records customer payments also has the authority to issue credit memos to customers.

2. An example of internal controls for cash is to make daily bank deposits.

A. True

B. False

3. Restricting employee authorization to establish, edit, or delete vendor accounts is an example of good internal controls.

A. True

B. False

4. A company policy of accepting cash payments from credit customers via the mail is an example of good internal control in the accounts receivable process.

A.True

B.False

5. Which of the following is not a reason why the ledger balance of cash may not agree with the bank statement balance?

A. deposit in transit

B. outstanding checks

C. bank service charge or other deduction

D. the last day of the month ends on the 30th instead of the 31st

6. The receiving department should not be given a copy of the purchase order for goods ordered that will received later. This is an example of good internal controls.

A. True

B. False

7. It is not necessary and is cost prohibitive to do a physical inventory count once a year if a company has a good system of inventory management in place.

A.True

B.False

8. Collusion can happen in any size organization.

A. True

B. False

9. There are a plethora of reasons why the dollar amount of a company's inventory in the accounting records differs from the dollar value of the physical inventory count. Obviously theft by employees and customers is one reason for the disparity, but there are many others. In a one-paragraph thread discuss another reason why the physical inventory count may not agree with the amount of inventory in the accounting records. Then discuss a strategy or internal control measure to put in place to safeguard against that loss.