An Internal Control System Consists of All the Following Policies

question 125

Multiple Choice

An internal control system consists of all the following policies and procedures except:

• A) Those necessary to ensure the safeguarding of an entity's assets.
• B) Those necessary to ensure that cash on hand and on deposit in checking accounts is beyond the minimal amount for ongoing operations.
• C) Those necessary to ensure the reliability of its accounting records.
• D) Those necessary to ensure the accomplishment of its overall objectives.

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Definitions:

Net Operating Income

A measure of the profitability of a business's core operational activities, excluding any income or expenses not directly related to its main operations.

Sales Volumes

The quantity of products or services sold by a company within a specific period.

Contribution Margin Per Unit

The difference between the selling price per unit and variable cost per unit of a product.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed costs in total costs.