Which Element of Internal Control Deals with a Company Having

question 18

Multiple Choice

Which element of internal control deals with a company having large amounts of cash on hand?

• A)Control environment
• B)Control activities
• C)Information and communication
• D)Risk assessment

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Definitions:

Nonliquidating Distribution

A nonliquidating distribution refers to distributions made by a corporation to its shareholders that are not in complete termination of the shareholder’s interest in the corporation.

Shareholders

Shareholders are individuals or entities that own one or more shares of stock in a corporation, making them partial owners of that corporation.

Corporation

A legal entity that is separate and distinct from its owners, providing limited liability and the ability to raise capital.

AMT Income

AMT Income refers to the income calculation used to determine the Alternative Minimum Tax, designed to prevent high-income taxpayers from excessively reducing their tax liability through credits and deductions.