Principles of Internal Control Include

question 75

Multiple Choice

Principles of internal control include:

• A)Divide responsibilities for related transactions.
• B)Perform regular and independent reviews.
• C)Record purchases using the gross method.
• D)Divide responsibilities for related transactions and perform regular and independent reviews.
• E)All of these answers are correct.

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Definitions:

Capital Deficiency

A situation where a company's liabilities exceed its assets, indicating potential financial distress.

Income Ratios

Metrics used to evaluate the financial performance of a business by comparing its income to other financial figures.

Liquidation Proceedings

The process of winding up a company's financial affairs by selling off its assets to pay creditors and distributing any remaining assets to shareholders.

Capital Account

An account showing the net worth of a business at a specific point in time, including assets contributed by the owners plus retained earnings.