Which of the Following Is Not an Effective Control Mechanism

question 28

Multiple Choice

Which of the following is not an effective control mechanism to safeguard an organization's check stock?

• A) Boxes of blank checks should be sealed with security tape.
• B) Organizations should use check stock that is high-quality and distinctly marked.
• C) The employee in charge of the check preparation function should periodically verify the security of unused checks.
• D) Voided checks should be promptly destroyed.

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Definitions:

Market Price

Today's price for buying or selling a service or asset within the marketplace.

Equity Multiplier

is a financial ratio indicating the proportion of the company’s assets financed by stockholders' equity, showing leverage.

Balance Sheet

A balance sheet that portrays a company's financial standing in terms of assets, liabilities, and the equity of its shareholders at a particular point.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, ending with the net income or loss for the period.