Consider the List of Risks and Internal Controls in the Table

question 35

Essay

Consider the list of risks and internal controls in the table below.For each row, indicate whether the internal control addresses the risk.If it does, indicate whether it is primarily preventive, detective or corrective in nature.

Understand the relationship between interest rates, investment decisions, and the demand for loanable funds.

Interpret how changes in interest rates affect the behavior of borrowers and lenders in the marketplace.

Understand the basic concepts of the loanable funds theory including supply and demand dynamics.

Identify the factors that cause shifts in the supply and demand for loanable funds.

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Definitions:

Balance Sheet

A report detailing a business's assets, liabilities, and equity held by shareholders at a certain moment.

Revenue

The total amount of money received by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.

Expense Accounts

Accounts used to record transactions relating to expenses incurred by a business, such as costs for materials, utilities, and salaries.

Common Stock

Equity securities representing ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.