The Focus of Controls in the Finance and Investment Cycle

question 43

Multiple Choice

The focus of controls in the finance and investment cycle is on:

• A)proper authorizations and competent personnel.
• B)computer controls over transactions.
• C)physical security of assets.
• D)prenumbered documents.

---

Definitions:

Gross Profit

The financial metric representing the difference between sales and the cost of goods sold.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control them.

Common Stock

Equities representing ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted to reflect the investor's share of the company's post-acquisition earnings or losses.