Which of the Following Represents an Inherent Limitation of Internal

question 41

Short Answer

Which of the following represents an inherent limitation of internal controls?
A. Bank reconciliations are not performed on a timely basis.
B. The CEO can request a check with no purchase order.
C. Customer credit check not performed.
D. Shipping documents are not matched to sales invoices.

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Definitions:

Activity-Based Costing

A method of allocating costs to products and services based on the activities that contribute to those costs instead of on traditional measures like machine hours.

Overhead Cost

General expenses related to the operation of a business that cannot be directly attributed to a specific product or service.

Product S1

A specific item or version of a product, likely distinguished by unique features or specifications.

Product Margin

The profit generated by selling a product, calculated by subtracting the cost of goods sold from the sales revenue of that product.