Internal Controls That Should Be Applied When a Business Takes

question 117

Multiple Choice

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:

• A) A manager confirms that all inventories are ticketed only once.
• B) Counters of inventory should be those who are responsible for the inventory.
• C) Counters confirm the validity of inventory existence, amounts, and quality.
• D) Prenumbered inventory tickets.
• E) Second counts by a different counter.

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Definitions:

Perfect Competition

A market structure characterized by a large number of small firms, homogeneous products, and free entry and exit, making firms price takers.

Average Total Cost

The total cost of production divided by the quantity produced, indicating the average cost of producing each unit of output.

Profit Maximization

The process by which a firm determines the price and output level that returns the greatest profit, considering costs and market demand.

Short-Run Supply Curve

A graphical representation showing the relationship between the market price of a good and the quantity supplied by producers in the short term.