A Company's Cash Custody Function Should Be Separated from the Related

question 55

Multiple Choice

A company's cash custody function should be separated from the related cash recordkeeping function in order to:

• A)Physically safeguard the cash
• B)Establish accountability for the cash
• C)Prevent the payment of cash disbursements from cash receipts
• D)Minimize opportunities for misappropriations of cash

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Definitions:

Abnormal Earnings

Earnings that are above or below the normal or expected level due to unusual circumstances or events.

Actual Earnings

The real profits generated by a company within a specific period, usually reported quarterly or annually.

Earnings Quality

An assessment metric that evaluates the degree to which a company's earnings are derived from sustainable sources and are repeatable, controllable, and bankable.

Multi-Step Income

Multi-step income statements provide a detailed breakdown of revenues, expenses, and profit, distinguishing between operating and non-operating activities.