For a Specific Internal Control to Be Effective, Both the Preventive

question 45

True/False

For a specific internal control to be effective, both the preventive and the detective aspect of the control must exist and be interrelated.

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Definitions:

Accrued Interest

Interest that has been incurred but not yet paid in cash during a specific time period.

Note

A financial instrument that represents a debt or obligation between two parties, wherein the issuer promises to pay the holder a certain amount of money at a future date.

Adjusting Journal Entry

An entry made in the accounting journals at the end of an accounting period to allocate items between accounting periods.

Allowance for Doubtful Accounts

An estimate of the amount of accounts receivable that may not be collected, used to reduce the carrying amount of receivables on the balance sheet.