Which of the Following Statements Is Most True? in a Properly

question 4

Multiple Choice

Which of the following statements is most true? In a properly controlled system of administrative and reporting functions:

• A)Employees have access to related assets or source documents, and on processes such as sales and cash receipts employees are given general authorization to initiate and process transactions.
• B)Employees have access to related assets or source documents, administrative processes are tightly controlled by supervisors, and on processes such as sales and cash receipts employees are given general authorization to initiate and process transactions.
• C)On processes such as sales and cash receipts, employees are given general authorization to initiate and process transactions.
• D)Employees have access to related assets or source documents and employees have the authority to initiate processes such as investing.

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Definitions:

Return on Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, demonstrating the profitability of a company from the perspectives of its equity investors.

Price-Earnings Ratio

The price-earnings ratio (P/E ratio) is a measure used in financial analysis to assess a company's valuation by dividing its current share price by its earnings per share.

Leverage

Using debt to increase the return on an investment.

Debt Financing

Raising funds for business activities by borrowing money, typically through loans or by issuing bonds.