Which of the Following Controls Would a Company Most Likely

question 305

Multiple Choice

Which of the following controls would a company most likely use to safeguard marketable securities when an independent trust agent is not employed?

• A) The investment committee of the board of directors periodically reviews the investment decisions delegated to the treasurer.
• B) Two company officials have joint control of marketable securities, which are kept in a bank safedeposit box.
• C) The internal auditor and the controller independently trace all purchases and sales of marketable securities from the subsidiary ledgers to the general ledger.
• D) The chairman of the board verifies the marketable securities, which are kept in a bank safe-deposit box, each year on the balance sheet date.

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Definitions:

Banks

Financial institutions licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Response Time

The amount of time it takes to react to a request, inquiry, or stimulus.

Defendant

The individual or group facing a legal case brought against them in a judicial setting.

Certified Mail

A postal service that provides the sender with a mailing receipt and electronic verification that an item was delivered or an attempt was made.