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.

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Definitions:

Marketable Securities

Financial instruments that can be quickly converted into cash, such as stocks, bonds, or treasury bills, with minimal loss of value.

Short-Term Debt

A financial obligation that is due to be repaid within a year or less.

Cash Cycle

The cash cycle, also known as the cash conversion cycle, measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Operating Cycle

The period it takes for a business to acquire resources, produce inventory, sell it in the market, and eventually collect cash from the sale.