Which of the Following Is Not an Internal Control Activity

question 158

Multiple Choice

Which of the following is not an internal control activity for cash?

• A) The number of persons who have access to cash should be limited.
• B) All cash receipts should be recorded promptly.
• C) The functions of record keeping and maintaining custody of cash should be combined.
• D) Surprise audits of cash on hand should be made occasionally.

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Definitions:

Net Sales

This is the revenue from all sales of goods and services less returns, allowances for damaged or missing goods, and discounts.

Cost of Goods SOLD

Expenses directly associated with the creation of goods a company sells, including costs for materials and labor.

Operating Expenses

Recurring expenses related to the central operations of a business, such as rent, utilities, and payroll, excluding costs of goods sold.

Earnings Per Share

A measure of a company's profitability, calculated as the net income divided by the number of outstanding shares of common stock.