Internal Controls
The accountant never goes to the bank to make a deposit. The accountant never touches cash. The accountant receives the deposit slip and makes a journal entry from the deposit slip. What type of an internal control does this illustrate?
What is limiting the number of people who handle cash or segregation of duties
To open a checking account, a business owner fills out a _________ ____, which contains the signature(s) of the person(s) authorized to write checks on the account.
What is a signature card.
This type of endorsement includes only the signature of the depositor. It does not indicate who the new owner of the check would be. This is not a safe endorsement because the check can be cashed by anyone.
What is a blank endorsement.
The person who signs the check.
What is drawer.
Checks that have been written but not taken to the bank for payment.
What are outstanding checks.
Subway makes night time deposits of cash each night. What type of an internal control does this illustrate?
What is deposit cash receipts in the bank daily or regularly.
A _________ is the person or business that has cash on deposit in a bank.
What is a depositor.
This type of endorsement transfers ownership to a specific owner and then restricts how the check is handled even after transfer of ownership.
What is a restrictive endorsement.
The person who the check is made payable to is called the _____.
What is payee.
What are deposits in transit (or outstanding deposits).
Making sure you know how much cash you have by comparing the bank statement to the check register is what type of cash control?
What is reconciling the bank statement.
A _______ ____ is a bank form listing the cash and checks to be deposited.
What is a deposit slip.
This type of endorsement transfers ownership of the check to a specific individual or business.
What is a special endorsement.
The bank on which the check is drawn.
What is the drawee.
The process of determining any differences between the bank statement and the check register is known as
What is bank reconciliation
The term for insuring employees who handle cash or cash records
What is bonding.
A _____ is a written order from a depositor telling the bank to pay a stated amount of cash to the person or business named as the payee.
What is a check.
This is an example of what kind of endorsement: Pay to the order of Mr. Lynch. Mrs. Glas
What is a special endorsement.
The number that looks like a fraction at the top right of the check, under the check number, that indicates the location of the bank that issued the check.
What is the ABA number or routing number.
A check returned to the depositor by the bank because the drawer's account does not have enough funds to cover the amount of the check.
NSF check
What internal control was the Town of Dixon in Illinois missing that allowed Rita Crundwell to steal 53 million dollars?
What is segregation of duties.
A ________ _______ allows a person to deposit cash in a bank and write checks against the account's balance.
What is a checking account.
"For deposit only" is an example of what type of endorsement.
What is restrictive endorsement.
What do the letters ABA stand for?
American Banking Association
A demand by the drawer, usually in writing, that the bank not honor a specific check
What is a Stop Payment Order.