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:

Suburban Shopping Mall

A large retail complex located in suburb areas, typically enclosed, featuring a variety of stores, restaurants, and entertainment options.

Neighborhood Stores

Small retail outlets located within residential areas that cater to the day-to-day needs of the local community.

Central Business District

The commercial and business center of a city, characterized by a concentration of retail, office buildings, and financial institutions.

Mini-Mart

A small retail outlet that typically sells a limited range of food and household products, often located in convenient locations for quick purchases.