Which of the Following Statements Is Most Correct with Respect

question 46

Multiple Choice

Which of the following statements is most correct with respect to separation of duties?

• A)A person who has temporary or permanent custody of an asset should account for that asset.
• B)Employees who authorize transactions should not have custody of related assets.
• C)Employees who open cash receipts should record the amounts in the subsidiary ledgers.
• D)Employees who authorize transactions should have recording responsibility for these transactions.

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Definitions:

Good Faith

A principle denoting honesty and sincerity of intention without any intent to deceive or defraud.

Fiduciary Duty

This is a legal obligation of one party to act in the best interest of another when entrusted with care of money, property, or confidential information.

Madoff's Ponzi Scheme

A massive fraudulent investment operation masterminded by Bernard Madoff, where returns to investors were paid from their own money or the money of new investors, rather than from profit earned.

Proper Name

A specific reference to a unique individual, place, or thing, typically starting with a capital letter and used to give identity.