If internal control is properly designed, the same employee should not be permitted to
A. Prepare disbursement vouchers and sign checks.
B. Initiate a request to order merchandise and approve merchandise received.
C. Sign checks and cancel supporting documents.
D. Receive merchandise and prepare a receiving report.
Answer:A
A is corrent because the preparation of disbursement vouchers and signing of checks places an individual in a position in which s/he can both prepare erroneous vouchers and then pay them.
B is incorrect because the person requesting the merchandise will be able to determine whether the appropriate merchandise has been received and should, therefore, approve its receipt.
C is incorrect because the person signing the checks should cancel supporting documents to avoid duplicate payment.
D is incorrect because the individual receiving the merchandise should prepare a receiving report so as to establish control over the goods.
