ch7

Question 1

What is internal control?

Answer 1

The organizational plan and all the related measures designed to accomplish :

• safeguard assets
• encourage employees to follow company policy
• promote operational efficiency
• ensure accurate, reliable accounting records

Question 2

What are the components of internet control?

Answer 2

MICER
monitoring of controls
information system
control procedures
control environment
risk assessment

Question 3

bank balance

Answer 3

add : deposits in transit
subtract : outstanding checks
add or subtract correction of bank errors.

Question 4

book balance

Answer 4

Add : bank collections, interest revenue, EFT receipts
subtract : service charge, NSF checks, EFT payments
add or subtract correction of book errors