Which of the Following Is Not a Generally Recognized Internal

question 20

Multiple Choice

Which of the following is not a generally recognized internal control activity?

• A) Establishment of clear lines of authority to carry out specific tasks
• B) Preparation of bank reconciliation on a monthly basis
• C) Reducing the cost of hiring seasonal employees
• D) Limiting access to computerized accounting records

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Definitions:

Constitution

The system of fundamental principles or established precedents according to which a state or other organization is governed.

Dividends Payable

represents a company's obligation to pay its shareholders a declared amount from its earnings.

Liability

A financial obligation or amount owed by a business or individual to others, which must be settled in the future.

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its net identifiable assets.