The Following Set of Items Describes Activities Completed by a Company

question 36

Multiple Choice

The following set of items describes activities completed by a company in purchasing and paying for merchandise and in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. (Choices may be used more than once.)
-The clerk in the accounting department records both purchases and payments of invoices.

• A)Adheres to sound internal controls
• B)Violates sound internal controls
• C)Neither strengthens nor violates internal control

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Definitions:

Cost of Carry

The cost associated with holding a financial position, including storage costs for commodities or interest costs for financial securities.

S&P 500 Index

An index comprising 500 of the largest companies listed on stock exchanges in the United States, serving as a barometer for the overall market's health.

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future.

Position

Refers to the amount of a specific security, commodity or currency that is owned or controlled by an individual or entity.