 In this presentation, we will take a look at some multiple choice questions related to cash and internal controls. First question, preparing a bank reconciliation on a monthly basis is an example of a, a required procedure by law. It's the law, martial law. B, separation of duties. Jury duty. C, protecting assets by providing the accuracy of cash records by proving the accuracy of cash records. D, a waste of time, or E, poor internal controls. So we'll go through these one more time, see if we can eliminate some of the options with the process of elimination. Preparing a bank reconciliation on a monthly basis is an example of either A, a required procedure by law. Now, typically it's not really required by law. It might be for, for publicly traded companies, but to be in compliance and be part of the, the internal control process for then the audit process, but not typically for non publicly traded punk companies at least. So I'm going to say it's not really a requirement. It's usually something that company would want to do. So I'm going to eliminate that. B says the separation of duties, preparing a bank reconciliation. Now that may be a part of the separation of duties process, but I don't think it's a separation of duties necessarily just to create the bank reconciliation. If we had a different person doing it and they were explaining that in the question, then it would be C, protecting assets by providing the accuracy by proving the accuracy of cash records. That sounds reasonable. We are checking the cash records by doing the bank reconciliation. D says a waste of time and probably not, we're probably as accountants not going to say it's a waste of time to reconcile. And then E says poor internal controls and a bank reconciliation probably is going to add to the internal controls. So I think it would be good internal controls. So just by the process of elimination, I think we're pretty basically left with C here, which says protecting assets by proving the accuracy of cash records. And that's kind of what we're doing here. We're basically double checking the cash records by a third party, the bank to double check the activity that has happened, thereby getting a better understanding of cash, which could help us to protect the assets. So that sounds reasonable. Let's read it one more time question and answer preparing a bank reconciliation on a monthly basis is an example of C, protecting assets by providing the accuracy of cash records. Next question, the three parties involved with a check a writer cashier and the bank B maker manager and payee C bookkeeper payee and bank D signer cashier and company or E maker payee and the bank. So once again, we'll go through these and see if we can eliminate some of these options with the process of elimination question is the three parties involved with a check. Now this is one of those where we might want to think about the three parties first before going through these because it could get confusing as we go through these. I mean, if we think about writing a check, we've got we've got the company or the person that's writing the check and then we're going to have who we're writing the check to. So maybe the vendor that we're getting the check to and then of course within this transaction helping us out is the bank. So you would think that you know those are going to be what's kind of involved here. It's usually we're paying someone that's an A to B transaction, but we have the person that's helping us process this information the financial institution that being the bank. So A says the writer, the cashier and bank. Now that seems like it possible because the cashier is someone within the company. So we've got the writer of the check and then the cashier sounds a bit repetitive. I'm not sure if that's going to be everything we don't see the vendor. B says the maker, the manager and the payee. So that's going to be the person I guess making the check and then manager possibly supervising the check is how we're thinking of that and the payee. But I don't see the bank involved here and that seems pretty crucial. I would think the bank would be in there somewhere. So I don't think it's that C says it's going to be the bookkeeper, the payee and the bank. So you know it's kind of possible but I'm not sure if the terminology is right. I'm going to keep that for now. D says the signer, the cashier and the company. So the signer and the cashier and the company it all sounds like kind of the same entity. It sounds like those are all on this side. We don't see the bank or the person we're writing the check to. So I don't think it's that and then it says the maker, the payee and the bank. And that from a most kind of broad standpoint is sounds pretty good because we got the person making the payee and the bank which would represent our three areas here. So I'm left with A, C and E. We've got the A saying writer cashier and the bank C bookkeeper payee and bank, E maker payee and bank. Once again the question the three parties involved with a check are going to be A, writer, cashier and the bank or bookkeeper payee and the bank or maker payee and the bank. Now A seems a bit kind of repetitive with the writer and the cashier. So I don't think I don't think we have a payee there. It's kind of the problem. C bookkeeper payee and the bank and E are going to be similar in the process. I think the difference between these are that the bookkeeper is a really kind of broad term. If we were talking about any check it might just be an individual writing a check and so whoever the maker of the check is whether they be a you know the bookkeeper or company or whoever is responsible for writing the check this would be a more broad characteristic. So I think for that reason E would be the better choice. So once again the three parties involved in writing a check E maker payee and bank. Next question. Account used to record cash overages and shortages from petty cash transactions. A cash gone, B bank reconciliation, C petty cash, D cash over and short, E cash receivable. So once again we'll read through it cross them off with the process of elimination. Account used to record cash overages and shortages from petty cash transactions. A cash gone. I'm I don't think that's the thing that's that that's that term doesn't sound familiar to me. B is I'm gonna cross that out. B bank reconciliation. That's gonna be a bank reconciliation is the process of reconciling from the bank to the books but I don't think that's what we're looking for here. C says petty cash that's the fund we're looking at petty cash but it doesn't tell us what account we're going to go to for the over and short. It's not going to go to the same petty cash and D says cash over and short that seems reasonable because that would be the over and short account. E says cash receivable and that's probably not going to be the case because what we're looking for is when the cash is not lined up to what happened on the cash. In other words the cash receipts register doesn't line up to the actual cash we already received. Doesn't mean we're going to get more cash or less cash because the difference has already happened. We just have to record that difference between what has been received versus what was recorded as cash sales and that will get the cash over and short. So D looks like the answer once again question and answer. Account used to record cash overages and shortages from petty cash transactions D cash over and short.