For a Corporation That Does Not Utilize the Services of an Independent

question 39

Multiple Choice

For a corporation that does not utilize the services of an independent registrar and stock transfer agent,which of the following represents a weakness in internal control over stock issuance?

• A)Stock certificates are prenumbered.
• B)Stock certificates are signed immediately upon receipt from the printer.
• C)Stock certificates are in the exclusive custody of a responsible officer.
• D)Stock certificates require the signature of two officers.

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Definitions:

Cost of Goods Sold

Direct expenses involved in producing the goods that a company sells, including costs of materials and labor.

LIFO

"Last In, First Out," an inventory valuation method where the most recently produced or acquired items are sold first.

Perpetual Inventory System

An inventory system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used to create the product.