A System of Internal Control

question 153

Multiple Choice

A system of internal control

• A)is infallible.
• B)can be rendered ineffective by employee collusion.
• C)invariably will have costs exceeding benefits.
• D)is premised on the concept of absolute assurance.

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Definitions:

Book Value

The net value of a company's assets expressed on its balance sheet, calculated as the total assets minus intangible assets (patents, goodwill) and liabilities.

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold, showing the profitability of a company.

Net Income

The total earnings of a company after subtracting all expenses, including taxes, from its total revenues.

Average Assets

A financial measure used to calculate the average total assets a company has had at its disposal over a certain period, often used in evaluating asset efficiency and ROI calculations.