Which of the Following Statements Is True in Terms of an Internal

question 5

Multiple Choice

Which of the following statements is true in terms of an internal control system?

• A) A good internal control system will help a company achieve reliable financial reporting, effective and efficient operations, and compliance with laws and regulations.
• B) An internal control system cannot be considered effective until the possibility of human error has been completely eliminated.
• C) Only large companies need to be concerned with a system of internal control.
• D) The extent of internal control activities adopted by a company must not be evaluated in terms of cost-benefit.

Grasp the components and formation of stockholders' equity, including the classification of organizational expenses.

Recognize the regulations and limitations on dividends, including cash and stock dividends.

Understand the accounting treatment and reporting of stock transactions, including issuance at a premium and treasury stock transactions.

Recognize the rights and payment order of preferred stockholders compared to common stockholders and creditors in liquidation scenarios.

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Definitions:

Privatization

The process of transferring an enterprise or industry from the public sector to the private sector.

Means of Production

The resources and tools used to produce goods and services, including land, labor, and capital, a concept central to Marxist theory.

Agricultural Revolution

The social and economic changes, including population increases, that followed from the domestication of plants and animals and the gradually increasing efficiency of food production.

Mechanized Seed Spreaders

Agricultural tools or machines designed for distributing seeds over the soil in an efficient and uniform manner, enhancing sowing processes.