An Effective System of Internal Control Requires That at Least

question 76

True/False

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

---

Definitions:

Stock Dividend

A form of dividend payment made by a corporation to its shareholders in the form of additional shares, rather than cash.

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders but retained for reinvestment in the business.

Par Value

Refers to the face value of a bond or the stock value stated in the corporate charter, establishing a minimum price per share for stocks issued.

Dividend Income

Income received from owning shares of a company that pays dividends, representing a portion of the company's profits distributed to shareholders.