A Good System of Internal Control Requires That the Physical

question 94

True/False

A good system of internal control requires that the physical custody of assets be separated from the accounting for those assets. This concept is known as safeguarding of assets and records.

---

Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Direct Write-off

A method for recognizing bad debt expense when a specific account receivable is determined to be uncollectible, directly reducing accounts receivable and recognizing the expense.

Bad Debt Expense

An accounting expense recognized for receivables that are no longer considered collectible, impacting both the balance sheet and income statement.

Uncollectible

Refers to debt or receivables that cannot be recovered or are very unlikely to be paid by debtors.