Which One of the Following Statements Is True

question 42

Multiple Choice

Which one of the following statements is true?

• A)Sound internal control practice dictates that disbursements should be made by check.
• B)Good cash management practice dictates that large cash balances should be maintained.
• C)The person handling cash should also prepare the bank reconciliation.
• D)Petty cash can be substituted for a checking account to expedite the payment of all disbursements.

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Definitions:

Profitability

A measure of the efficiency and financial performance of a business, indicating its ability to generate income relative to revenue, assets, or equity.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but not control those policies.

Voting Shares

Shares that give the shareholder the right to vote on company matters at shareholder meetings.

ASPE

Accounting Standards for Private Enterprises, a set of accounting principles for private companies in Canada.