A company's cash custody function should be separated from the related cash recordkeeping function in order to:
A)Physically safeguard the cash
B)Establish accountability for the cash
C)Prevent the payment of cash disbursements from cash receipts
D)Minimize opportunities for misappropriations of cash

Question

Quizplus · Accepted Answer

Separating the cash custody function from the cash recordkeeping function helps to minimize opportunities for misappropriations of cash. This is because it reduces the likelihood of one person having too much control over the cash and the records, making it harder for them to manipulate both. By separating the two functions, it becomes easier to establish an audit trail and to ensure that the cash is properly accounted for.

A Company's Cash Custody Function Should Be Separated from the Related