Which of the Following Is Not an Element of the Internal

question 106

Multiple Choice

Which of the following is not an element of the internal control environment?

• A) management philosophy and operating style
• B) organizational structure of the firm
• C) well-designed documents and records
• D) the functioning of the board of directors and the audit committee

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Definitions:

Accounting Principle

A rule or guideline in accounting that dictates how financial transactions and elements should be recorded and reported.

Adjusting Journal Entries

Adjusting journal entries are made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Debit Portion

The segment of a financial transaction recorded on the left side of an account, indicating an increase in assets or expenses or a decrease in liabilities or equity.

Expense Account

An account that tracks the costs incurred by a company in its operational activities, such as rent, utilities, and salaries.