Accounting 201 - Chapter 7 Quiz

T/F Internal control is mainly concerned with the amount of authority a supervisor exercises over a subordinate - ANS-False T/F A highly automated computerized system of accounting eliminated the need for internal control. - ANS-False T/F The safeguarding of assets is an objective of a company's system of internal control - ANS-True T/F Management is responsible for establishing a system of internal control. - ANS-True T/F Internal control is most effective when several people are responsible for a given task - ANS-False T/F The responsibility for keeping the records for an asset should be separate from the physical custody of that asset. - ANS-True T/F Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency. - ANS-False T/F The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit. - ANS-True T/F An effective system of internal control requires that a least two individuals be assigned to one cash drawer so that each can serve as check on the other. -Continues...