Learning Objective $07-01$ Define what is meant by internal control and describe some key elements of an internal control system for cash receipts and disbursements.

Skip to question

$[$The following information applies to the questions displayed below.$]$

Internal control refers to the plan designed to encourage adherence to company policies and procedures; promote operational efficiency; minimize errors, thefts, or fraud; and maximize the reliability and accuracy of accounting data. Key elements of an internal control system for cash receipts and disbursements include separation of record keeping from control of cash duties and the periodic preparation of a bank reconciliation.