Which of the Following Is TRUE of Good Internal Controls

question 128

Multiple Choice

Which of the following is TRUE of good internal controls over payroll?

• A) Accounting for payroll should be separate from hiring and firing of employees.
• B) Disbursement of paychecks should not be separate from the function of maintaining payroll records.
• C) Hiring and firing employees should not be separated from accounting and from disbursing paychecks.
• D) Cash receipts from customers should be separated from the accounting for accounts receivable.

---

Definitions:

Combinations

The act of combining or joining two or more elements to form a new whole.

Organizational Effectiveness

The measure of an organization's efficiency in achieving its goals and objectives through the optimal use of resources, processes, and people.

Profitability

The degree to which a business or activity yields financial gain or profit.

Bottom Line

The fundamental and most important outcome of a business or an endeavor, often referring to financial profitability.