Storing Cash in a Company Safe Is an Application of Which

question 158

Multiple Choice

Storing cash in a company safe is an application of which internal control principle?

• A) Segregation of duties
• B) Documentation procedures
• C) Physical controls
• D) Establishment of responsibility

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of the shareholders.

Prepaid Expenses

Costs paid in advance for goods or services to be received in the future, treated as assets until used.

Acid-Test Ratio

A financial metric that measures the ability of a company to pay off its current liabilities with its quick assets such as cash, accounts receivable, and short-term investments.

Marketable Securities

Financial instruments that can be easily converted into cash with minimal loss of value, often used for short-term investments.