The owner of Zeke's Landscaping Designs just hired an office manager to handle all the office functions for him. Among other responsibilities, the office manager will handle key accounting functions such as processing customer payments, writing cheques toemployees to pay the payroll, handle daily bank deposits at the bank, pay suppliers, and reconcile the company bank account bank reconciliations. What internal cash controlpractice is being overlooked by the owner?
A)Ensuring all cash disbursements are tracked by making payments by cheque.
B)Separation of cash payment from cash disbursement function.
C)Performing external audit.
D)Making daily cash deposits.
E)Frequent preparation of bank reconciliations.

Question

Quizplus · Accepted Answer

The owner is not separating the cash payment and cash disbursement functions, which is a key internal cash control practice. This can increase the risk of fraudulent activity by allowing the office manager to handle both incoming and outgoing cash transactions without any oversight. All other practices mentioned in the question are being addressed by the office manager.

The Owner of Zeke's Landscaping Designs Just Hired an Office