Of the Following Statements About an Internal Control System,which One

question 74

Multiple Choice

Of the following statements about an internal control system,which one is correct?

• A) The maintenance of the system of internal control is an important responsibility of the internal audit function.
• B) Administrative controls relate directly to the safeguarding of assets.
• C) Because of the cost/benefit relationship, tests of controls may be applied on a test basis in some circumstances.
• D) Well designed internal control activities always prevent collusion among employees.

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Definitions:

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A type of good whose demand decreases when consumer income rises, contrary to normal goods, which see increased demand as incomes rise.

Inferior Good

A type of good whose demand decreases when the income of consumers increases.

Normal Good

An item whose demand escalates as the income of consumers increases, and contracts when their income decreases.