Identify Which Principle of Internal Control Is Being Followed in Each

question 212

Essay

Identify which principle of internal control is being followed in each of the following cases.
1. Warehouse employees do not have access to the accounting records.
2. Pre-numbered shipping documents are prepared for each shipment of goods.
3. The locked warehouse is accessible only by warehouse employees with keys.

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Definitions:

Common Stock

A form of corporate equity ownership, representing a share of the company and typically carrying voting rights.

Cumulative Preferred Stock

A type of preferred stock where dividends that have not been paid in the past must be paid out to preferred shareholders before common shareholders can receive any dividends.

Par Common Stock

The face value of common stock as designated in the corporate charter, which is the minimum amount that shares can be issued for.

Total Dividend

The sum of all dividends paid out to shareholders for a specific period, representing the share of profits distributed.