Which of the Following Is Not a Limitation of Internal

question 71

Multiple Choice

Which of the following is not a limitation of internal control?

• A) cost of establishing control procedures
• B) the human element
• C) use of a bank account
• D) the size of the company

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Definitions:

Marketability

The ease with which a product can be sold or a security can be bought or sold in the market without affecting its price.

Profitability

An indicator of how profitable a company is relative to its total assets, demonstrating the efficiency with which a company can generate profit from its operations.

Receivables Turnover Ratio

A financial metric that measures how efficiently a company collects on the credit it extends to customers by comparing net credit sales to average accounts receivable.

Profit Margin

The percentage of revenue that remains as profit after all expenses are deducted from sales.