The Following Set of Items Describes Activities Completed by a Company

question 138

Multiple Choice

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures.
-An employee from the accounting department compares the control list and the cash register tapes with the bank deposit slip.

• A)Adheres to sound internal control procedures
• B)Violates sound internal control procedures
• C)Neither strengthens nor violates internal control

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Definitions:

Present Value

The present value of a future amount of money or a series of cash flows, discounted by a certain rate of return.

Net Present Value Rule

A principle that states an investment should be made if the net present value of its cash flows, discounted at the hurdle rate, is positive.

Invest

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.