All of the Following Are the Goals of Internal Controls

question 149

Multiple Choice

All of the following are the goals of internal controls over merchandising transactions except

• A) To keep credit losses at a minimum
• B) To retain enough cash to take advantage of cash discounts
• C) To keep the appropriate amount of inventory on hand
• D) To decide on the quality of materials to be purchased

Recognize the classifications of assets, including distinctions between physical and intangible assets and their impact on a company's financial position.

Understand the accounting entries related to stock transactions, including the purchase of common stock by stockholders.

Differentiate between various types of accounts based on their normal credit balance and understand how transactions impact these accounts.

Analyze and record transactions related to payments (e.g., insurance, dividends), emphasizing the correct application of debit and credit rules.

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Definitions:

Capital Balances

The amount of money that each partner or shareholder has contributed to a company, plus their share of the net income, minus any withdrawals.

Profits and Losses

The net earnings or losses of a company over a specified period, determined by subtracting total expenses from total revenues.

Remaining Partners

Partners who continue the partnership business after one or more partners have exited through withdrawal, ejection, or death.