3)Six internal control principles related to cash transactions are discussed in the textbook. These principles, with code letters, are:

Code Internal Control Principle

A Authorization

B Segregation of duties

C Documentation

D Safeguard assets and records

E Independent verification

F Other controls

Match the above principles to the following applications related to cash receipts and cash disbursements by placing the code in the space provided. Each code letter can be used once, more than once, or not at all.

____ 1. The duties of receiving and recording cash should be assigned to different individuals.

____ 2. Daily cash counts should be made by cashier department supervisors. [12]

____ 3. Cash receipts should be deposited in the bank in total daily.

____ 4. Cash register tapes should be used for over-the-counter receipts.

____ 5. Each cheque should be compared with approved invoices before being issued.

____ 6. The duties of approving an item for payment and paying the item should be performed by different individuals.

____ 7. All cheques should be prenumbered.

____ 8. Only the controller should be authorized to sign cheques.

____ 9. All personnel who handle cash should be bonded.

____ 10. Blank cheques should be stored in a safe, and access should be restricted.

____ 11. Only designated personnel should be authorized to handle and have access to cash receipts.

____ 12. After payment, an invoice should be stamped PAID.