Which of the Following Is the Best Internal Control Over

question 45

Multiple Choice

Which of the following is the best internal control over fixed assets?

• A) Analyze monthly variances between authorized and actual expenditures.
• B) Establish a written company policy distinguishing between capital and revenue expenditures.
• C) Require acquisitions to be authorized by user departments.
• D) Use a budget to control acquisitions and retirements.

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Definitions:

Controlling Investor

An individual or entity that holds a significant portion of a company's shares or voting rights, granting them substantial influence or control over the company's decisions and policies.

Investee

A company in which an investor holds a minor equity or debt stake, implying a level of influence but not full control.

Fair Value

An estimate of the market value of an asset or liability, based on the current price to sell an asset or settle a liability in an orderly transaction.

Controlling Influence

The power or authority to govern or direct the management and policies of another entity without necessarily having majority ownership.