Which of the Following Would Be the Best Protection for a Company

question 60

Multiple Choice

Which of the following would be the best protection for a company that wishes to prevent the "lapping" of trade accounts receivable?

• A)Separate duties so that the bookkeeper in charge of the general ledger has no access to incoming mail.
• B)Separate duties so that no employee has access to both checks from customers and currency from daily cash receipts.
• C)Have customers send payments directly to the company's depository bank.
• D)Request that customer's payment checks be made payable to the company and addressed to the treasurer.

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Definitions:

Annual Dividend

The total amount of dividends that a company pays to its shareholders for each share they own in a given fiscal year.

Rate of Return

The profit or deficit experienced by an investment within a certain timeframe, depicted as a percentage of the investment's original price.

Required Return

The minimum expected return investors demand for an investment, considering its risk.