An Example of an Arrangement That Helps to Enforce Commitment

question 36

Multiple Choice

An example of an arrangement that helps to enforce commitment by a central bank is

• A)New Zealand's Policy Targets Agreement.
• B)the Bank of Canada's interest rate target.
• C)an independent central bank.
• D)deposit insurance.
• E)the lender of last resort.

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Definitions:

Internal Control System

Procedures and methods to control a firm’s assets as well as monitor its operations.

Accounting Department

A division within a company or organization that is responsible for managing financial records, transactions, and reporting.

Periodic System

An inventory system that updates inventory and cost of goods sold at the end of each accounting period.

Vouchers Payable

A liability account in the general ledger that represents the controlling account for the sum of individual vouchers.