Which of the Following Statements Most Likely Represents a Control

question 20

Multiple Choice

Which of the following statements most likely represents a control consideration for an entity that performs its accounting using portable computing devices?

• A) It is usually difficult to detect arithmetic errors.
• B) Unauthorized persons find it easy to access the computer and alter the data files.
• C) Transactions are coded for account classifications before they are processed on the computer.
• D) Random errors in report printing are rare in packaged software systems.

Recognize the requirements for the preparation of separate financial statements under specific accounting standards.

Understand the considerations beyond percentage ownership in determining financial reporting obligations.

Identify the types of entities that can be considered subsidiaries and the scope of investments in equity securities according to relevant accounting standards.

Understand the criteria and requirements for a company to present consolidated financial statements.

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Definitions:

Illegal Agreements

Contracts or arrangements that are prohibited by law due to their nature, purpose, or the means by which they are achieved.

Unconscionable Agreements

Contracts or agreements that are so unfairly one-sided that they are considered void under the law due to the significant imbalance in power and information between the parties involved.

Contracts of Adhesion

Contracts of adhesion refer to standard-form agreements prepared by one party, leaving the other party little or no ability to negotiate more favorable terms.

Public Policy

Principles and standards considered by the government to be beneficial for the community and used to guide legislative or regulatory actions.