Question

Brief Exercise 7-4 Rolling Hills Ltd. has the following internal controls over cash payments. Identify the control activity that is applicable to each procedure. 1. Company cheques are prenumbered. 2. The bank statement is reconciled monthly by the assistant controller. 3. Blank cheques are stored in a safe in the controller's office. Both the controller and the assistant controller are required to sign cheques or authorize electronic payments. 5. Cheque signers are not allowed to record cash payments. 6. All payments are made by cheque or electronic transfer. Physical controls Segregation of duties Assignment of responsibility Documentation Review and reconciliation Question Attempts: 0 of 3 used SAV

Answer 1

1. Company cheques are prenumbered.	Documentation
2. The bank statement is reconciled monthly by the assistant controller	Review and Reconciliation
3. Blank cheques are stored in a safe in the controller's office	Physical controls
4. Both the controller and the assistant controller are required to sign	Assignment of responsibility
cheques or authorize electronic payments
5. Cheque signers are not allowed to record cash payments	Segregation of Duties
6. All payments are made by cheque or electronic transfer	Documentation