Purposes of Internal Control Include

question 48

Multiple Choice

Purposes of internal control include:

• A)Safeguarding assets.
• B)Ensuring financial statement reliability.
• C)Promoting operational efficiency.
• D)All of these.

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Definitions:

Discounts Lost

Refers to the financial opportunity lost by not taking advantage of discounts offered by suppliers for early payments.

Net Method

An accounting practice where purchases are recorded at their net cost, taking into account any discounts offered for early payment.

Cash Discounts

A reduction in the amount owed by a customer if payment is made within a specified period.

Periodic Inventory System

An inventory accounting system where updates are made on a periodic basis rather than after each transaction.