When an Entity Uses a Trust Company as Custodian of Its

question 60

Multiple Choice

When an entity uses a trust company as custodian of its marketable securities, the possibility of concealing fraud most likely would be reduced if the:

• A)trust company has no direct contact with the entity employees responsible for maintaining investment accounting records.
• B)securities are registered in the name of the trust company rather than the entity itself.
• C)interest and dividend checks are mailed directly to an entity employee who is authorized to sell securities.
• D)the trust company places the securities in a bank safe deposit vault under the custodian's exclusive control.

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Definitions:

Histogram

A graphical display of data using bars of different heights to represent the frequency of numerical data intervals.

Bin Width

The size of intervals in a histogram or bar chart, determining the range of values each bin or bar represents.

Lower Bin Limit

The minimum value within a bin or interval in frequency distribution or histogram.

Histogram

A visual chart that categorizes a collection of data points into specified intervals, indicating how often data appears within those intervals.