The Component of Internal Control That Is the Foundation for All

question 92

Multiple Choice

The component of internal control that is the foundation for all other components is

• A) risk assessment.
• B) information and communication.
• C) control activities.
• D) control environment.

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Definitions:

Single-Step Income Statement

A simplified income statement that summarizes revenues and expenses in a single step, without categorizing them.

Sales Revenue

Financial income derived from transactions involving the sale of products or provision of services over an interval of time.

Gross Profit Rate

The ratio of gross profit to total sales, indicating the percentage of revenue that exceeds the cost of goods sold.

Net Income

The amount of earnings left after all expenses, including taxes and operating costs, have been subtracted from total revenue; a measure of company profitability.