Which of the following is an accurate statement regarding cash?
A) The amount of cash flowing into and out of the cash account is often larger than that for any other account in the financial statements.
B) The susceptibility of cash to embezzlement is greater than that for other types of assets.
C) Auditors must verify whether recorded cash in the general ledger correctly reflects all cash transactions that took place during the year.
D) All of the above are accurate statements.

Question

Quizplus · Accepted Answer

All three statements are accurate. Cash is a highly liquid asset, so the amount of cash flowing in and out of the account is typically larger than other accounts. Cash is also highly susceptible to fraud and embezzlement, so it is important to have strong controls in place to mitigate these risks. Lastly, auditors must verify that the recorded cash balances in the general ledger are accurate and reflect all transactions that occurred during the year.

Which of the Following Is an Accurate Statement Regarding Cash