Before Any Internal Control Procedure Is Initiated, a Question Which

question 42

Multiple Choice

Before any internal control procedure is initiated, a question which should be addressed by the company is:

• A)Will this stop all theft?
• B)Is this the best security money can buy?
• C)How much benefit will be derived from the cost of the procedure?
• D)Will this prevent all accounting errors?

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Definitions:

Initial Investment

The initial amount of money put into a project or venture at its inception.

Computer Equipment

Hardware used in the processing, storage, and display of data, including computers, servers, monitors, and related peripherals.

Accounting Records

Documentation and books that keep track of all financial transactions, assets, liabilities, income, and expenses of a business.

Accounting Equation

The fundamental equation stating that Assets = Liabilities + Owner's Equity, used as the basis for double-entry bookkeeping.