Which of the Following Is the Most Important Requirement of Internal

question 40

Multiple Choice

Which of the following is the most important requirement of internal control?

• A)effectiveness and efficiency of operations
• B)reliability of financial reporting
• C)compliance with applicable laws and regulations
• D)systems and procedures that help to manage risk and achieve objectives

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Definitions:

Gross Method

An accounting method for recording purchases at the invoice amount without deducting any discounts offered.

Periodic Method

An inventory accounting system where updates to inventory accounts and cost of goods sold are made periodically at the end of a reporting period.

Journal Entries

Recorded transactions in the accounting ledger that reflect the financial activities of a business.

Voucher

A document or record acting as evidence for a transaction, or as an authorization for payment.