Question

6-27 “If everyone were honest, there would be no need for internal controls to safeguard cash.” Do you agree? Explain. 6-28 Distinguish between internal accounting control and internal administrative control.

Answer 1

Answer:

6-27 )

No,I disagree that on the off chance that everybody is honest, at that point there would be no need to actualize internal controls to safeguard cash .

Regardless of whether everybody was honest ;there would be as yet the issues of basic mistakes, incompetence, and laziness .Somebody may lose the money in the event that it isn't quickly deposited.Somebody may make a look at to an inappropriate individual or in an inappropriate sum. Internal controls should likewise place to make  to ensure money doesn't get too low for the organization to be able to meet every day cost and for the organization to not have a lot of money on the balance sheet (as money doesn't make as a lot of relative income by itself as it would whenever contributed)

6-28)

Distinction between the internal accounting controls and internal administrative controls:

Internal accounting controls are all methods and techniques that encourage the board planning and control of activities.

• Example incorporate formal organizational charts ,budgets and execution reports .

Internal managerial controls or internal administrative controls are the techniques and methods for authorizing exchanges or transactions ,safeguarding assets ,and ensuring the precision of the financial records.

• Example incorporate supervisor authorization ,transaction recording ,asset controls safeguards,and reconciliation of records with different records and physical tallies or counts.

Note:

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