Which of the Following Is True of Good Internal Controls

question 47

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.

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Definitions:

Diversifiable Risk

A type of investment risk that can be reduced or eliminated through the use of diversification strategies across different assets or asset classes.

Beta

A measure of a stock's volatility in relation to the overall market, indicating its riskiness compared to the market average.

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk, which cannot be mitigated through diversification.

Expected Return

An estimate of the various amounts of money that one could potentially gain or lose from an investment.