An Internal Control System Consists of All of the Following

question 68

Multiple Choice

An internal control system consists of all of the following policies and procedures except those necessary to ensure

• A)the safeguarding of an entity's assets.
• B)that cash on hand and on deposit in checking accounts is beyond the minimal amount for ongoing operations.
• C)the reliability of an entity's accounting records.
• D)the accomplishment of an entity's overall objectives.

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Definitions:

Accounting Profits

The net income for a company calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Cost Per Unit

The amount of financial expense associated with producing a single unit of a product or service.

Production

The process of creating goods and services through the combination of labor, capital, and resources.

Economic Profit

A measure of profit that includes recognition of implicit costs (like the cost of equity capital). Economic profit measures the true profitability of decisions.