An Internal Control System Consists of All the Following Policies

question 125

Multiple Choice

An internal control system consists of all the following policies and procedures except:

• A) Those necessary to ensure the safeguarding of an entity's assets.
• B) Those necessary to ensure that cash on hand and on deposit in checking accounts is beyond the minimal amount for ongoing operations.
• C) Those necessary to ensure the reliability of its accounting records.
• D) Those necessary to ensure the accomplishment of its overall objectives.

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Definitions:

Goods in Transit

Merchandise or products that have been shipped by a seller but not yet received by the purchaser, present in the distribution channel.

Inventory Inclusion

The process of adding items to a company's inventory count, ensuring they are recorded as assets in the financial statements.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set.

Perpetual System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.