Indicate Whether Each Business Practice Listed Below Strengthens (S) or Weakens

question 94

Essay

Indicate whether each business practice listed below strengthens (S) or weakens (W) a company's system of internal control.
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a. Discouraging employees from taking paid vacations
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b. Using banking facilities as much as possible
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c. Having employees bonded
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d. Conducting surprise audits of cash on hand
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e. Having one person open the mail
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_____ f. Having the receiving department compare goods received with goods ordered

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Definitions:

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to calculate operating cash flow.

Indirect Method

A financial reporting approach where increases and decreases in inventory, accounts payable, and accounts receivable are reflected in cash from operating activities.

Operating Activities

Activities related to the day-to-day functioning of a business that are reflected in its cash flow from operations.

Net Income

The company's net income following the deduction of all costs and taxes from its total revenue.