A Primary Purpose of Internal Controls Is To

question 52

Multiple Choice

A primary purpose of internal controls is to:

• A)form a basis for evaluating employees.
• B)monitor production quality.
• C)avoid clerical errors.
• D)meet objectives of maintaining sound documents and records and accurate financial reporting.

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Definitions:

Retailers

Merchants who buy goods from wholesalers for resale to customers.

Credit Terms

Conditions under which credit is extended by a seller to a buyer, detailing the repayment period, interest rate, and penalties for late payment.

Discount

A reduction in the price of goods or services, usually offered to encourage purchase or provided for early payment.

Sales Tax

A tax imposed by a government on the sale of goods and services.