One of the Most Important Reasons for Having a System

question 2

Multiple Choice

One of the most important reasons for having a system of internal control is to:

• A)improve the effectiveness and efficiency of the operations of the organization.
• B)ensure no employees have ever been convicted of fraud or embezzlement.
• C)eliminate any temptations that may be presented to employees that could lead to theft from the company.
• D)prevent a salesperson from using a company car for personal transportation.

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Definitions:

Residual Value

The estimated value of an asset at the end of its useful life.

Lease Terms

The conditions under which a lease will be granted, including duration, payment intervals, fees, restrictions, and penalties.

Lease Obligations

Financial commitments a company incurs as a result of entering into a lease agreement for property, plant, or equipment.

Lessee

A person or entity that leases an asset from another party, known as the lessor.