One of the Seventeen COSO Principles of Internal Control States

question 48

Multiple Choice

One of the seventeen COSO principles of internal control states that "the organization holds individual accountable for their internal control responsibilities in the pursuit of objectives." To which component of internal control does this principle belong?

• A)Control Environment
• B)Risk Assessment
• C)Control Activities
• D)Information and Communication

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Definitions:

Net Realizable Value

The amount (Accounts Receivable – Allowance for Doubtful Accounts) that is expected to be collected.

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services delivered on credit before any deductions for returns or bad debts.

Bad Debts Expense

The cost associated with accounts receivable that are not expected to be collected.

Contra Asset

An asset account where its balance is opposite of the normal balance, used to offset the balance of a related account, such as allowance for doubtful accounts offsetting accounts receivable.