Which of the Following Statements About Internal Control Is Correct

question 1023

Multiple Choice

Which of the following statements about internal control is correct?

• A) There is no relationship between an entity's objectives and the components of internal control.
• B) Internal control is relevant to the entire entity, or to any of its operating units or business functions.
• C) All of the entity's objectives and related internal controls are relevant to an audit of the entity's financial
• D) An understanding of internal control relevant to each of the entity's operating units and business functions is necessary.

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Definitions:

Budgeted Accounts Receivable

Predicts the amount of money owed to a business by its customers for sales made on credit during a specific period.

Collections

The process of gathering money that is owed by customers, often in relation to accounts receivable.

Required Production

The quantity of goods that a company needs to produce in order to meet customer demand.

Ending Raw Materials Inventory

The value of raw materials still on hand at the end of an accounting period, which have not yet been used in the production process.