Question

Rolling Hills Ltd. has the following internal controls over cash payments. Identify the control activity that...

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.

 select a control activity                                                          Segregation of dutiesPhysical controlsAssignment of responsibilityDocumentationReview and reconciliation

2.

The bank statement is reconciled monthly by the assistant controller.

 select a control activity                                                          Review and reconciliationPhysical controlsDocumentationSegregation of dutiesAssignment of responsibility

3.

Blank cheques are stored in a safe in the controller’s office.

 select a control activity                                                          Physical controlsSegregation of dutiesDocumentationReview and reconciliationAssignment of responsibility

4.

Both the controller and the assistant controller are required to sign cheques or authorize electronic payments.

 select a control activity                                                          Segregation of dutiesDocumentationPhysical controlsAssignment of responsibilityReview and reconciliation

5.

Cheque signers are not allowed to record cash payments.

 select a control activity                                                          Review and reconciliationSegregation of dutiesAssignment of responsibilityPhysical controlsDocumentation

6.

All payments are made by cheque or electronic transfer.

 select a control activity                                                          Assignment of responsibilityReview and reconciliationSegregation of dutiesDocumentationPhysical controls
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