The Objectives of Internal Control Are to

question 72

Multiple Choice

The objectives of internal control are to

• A) control the internal organization of the Accounting Department personnel and equipment
• B) provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with
• C) prevent fraud and promote the social interest of the company
• D) provide control over "internal-use only" reports and employee internal conduct

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Definitions:

Variable Costs

Costs that vary in direct proportion to changes in levels of production or sales, such as raw materials and labor expenses.

Variable Costs

Costs that change in proportion to the level of production or sales activity, such as raw materials or direct labor.

Direct Proportion

A relationship between two variables where an increase in one results in a proportional increase in the other.

Activity Level

In accounting and management, refers to the volume of units produced, hours worked, or any other measure of output that drives the costs in a business.