Which of the Following Is a Correct Statement

question 132

Multiple Choice

Which of the following is a correct statement?

• A) The proof of cash receipts is a test of the balance in the cash account at a point in time.
• B) The proof of cash disbursements is effective for discovering a check written for the incorrect amount for which the dollar amount in cash disbursements is also incorrect.
• C) It is extremely difficult for an auditor to detect thefts of cash, especially omitted transactions and account balances.
• D) Segregation of duties is not an important control procedure for cash in a small business.

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Definitions:

Highly Inelastic

A situation in which demand or supply changes very little in response to large changes in price, often applicable to essential or unique goods and services.

Herfindahl Index

An economic indicator used to measure the size of companies in relation to the industry and the level of competition among them.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, including high start-up costs, strict regulations, and established brand loyalty.