The correct answer is D. All of the above.
A system of internal control is a set of policies and procedures designed to ensure the accuracy and reliability of financial reporting, the effectiveness and efficiency of operations, and the compliance with applicable laws and regulations.
Checking all transactions means reviewing all cash receipts and disbursements to ensure that they are properly recorded and authorized.
Documentary evidence is any document that supports a financial transaction, such as invoices, receipts, and bank statements.
All of these are necessary to verify cash transactions. A system of internal control helps to ensure that transactions are recorded accurately and that there are no unauthorized transactions. Checking all transactions helps to identify any errors or irregularities. Documentary evidence provides proof of the occurrence of a transaction.
Here are some additional details about each of the options:
- A system of internal control is a set of policies and procedures designed to ensure the accuracy and reliability of financial reporting, the effectiveness and efficiency of operations, and the compliance with applicable laws and regulations. A well-designed system of internal control can help to prevent fraud and errors, and can also help to ensure that the company’s financial statements are accurate and reliable.
- Checking all transactions means reviewing all cash receipts and disbursements to ensure that they are properly recorded and authorized. This includes reviewing invoices, receipts, and bank statements to make sure that they are accurate and that the transactions are properly authorized. Checking all transactions can help to identify any errors or irregularities, and can also help to prevent fraud.
- Documentary evidence is any document that supports a financial transaction. This includes invoices, receipts, bank statements, and other documents that provide evidence of the occurrence of a transaction. Documentary evidence is important because it can be used to verify the accuracy of financial records and to investigate any errors or irregularities.
In conclusion, all of the options are necessary to verify cash transactions. A system of internal control helps to ensure that transactions are recorded accurately and that there are no unauthorized transactions. Checking all transactions helps to identify any errors or irregularities. Documentary evidence provides proof of the occurrence of a transaction.