Control Risk for Notes Payable Is Usually Assessed as Low

question 10

Multiple Choice

Control risk for notes payable is usually assessed as low.This occurs because internal controls are normally good for notes payable and

• A)creditors would complain if the notes are not paid.
• B)interest expense can easily be distinguished from bank service charges.
• C)there are a small number of large transactions for this type of transaction.
• D)inclusion in the accounts payable listing helps track the notes.

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Definitions:

Statistical Tool

Methodologies and techniques used for analyzing data to identify patterns, trends, and relationships among variables.

Standard Time

The established amount of time required to complete a specific task or process under normal working conditions.

Average Observed

The mean value calculated from a set of observed data points, representing the central tendency of the dataset.

Time Studies

The process of observing and recording the time taken to perform tasks to establish standards for efficient work performance.