Which of the Following Is NOT a Reason Why Paying

question 250

Multiple Choice

Which of the following is NOT a reason why paying by check is an important internal control?

• A) The check provides a record of the payment.
• B) The check must be signed by an authorized official.
• C) Before signing the check, the purchasing agent reviews the invoice or other evidence supporting the payment.
• D) All of the above statements are correct.

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Definitions:

Liability

Financial obligations or debts that a company or an individual owes to others, which are expected to be settled in the future.

Capital Lease

A lease agreement that grants the lessee control over an asset, and is recorded as an asset on their balance sheet, essentially treating it like a purchase.

Operating Leases

Lease agreements that allow for the use of an asset but do not convey rights of ownership, typically used for short-term leasing of equipment or vehicles.

Return On Assets

A financial metric that measures how efficiently a company's management is using its assets to generate earnings.