Which of the following is characteristic of internal control?

Question

Quizplus · Accepted Answer

Sound internal control practice dictates that disbursements should be made by cheque as it provides a clear trail of transactions and reduces the risk of fraud or errors.

Answer: C 
 The person handling cash should not also prepare the bank reconciliation as it allows for potential errors or fraud to go unnoticed. Separation of duties is an important internal control practice.

Answers B and D are incorrect as they go against good internal control practices. Large cash balances increase the risk of theft or loss, and substituting petty cash for a chequing account does not provide proper documentation or oversight for disbursements.

Which of the Following Is Characteristic of Internal Control