Distinguish Preventive Controls from Detective Controls and Give Examples of Each

question 98

Essay

Distinguish preventive controls from detective controls and give examples of each as they relate to cash.

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Definitions:

Direct Expenses

Direct expenses are costs that can be directly attributed to a specific product or service, such as raw materials or labor directly involved in production.

Cash Conversion Cycle

A metric that evaluates how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Expense Allocation

The process of distributing costs among different departments, projects, or accounts, based on their usage or benefit from the services.

Maintenance Department

A functional area in a business dedicated to the upkeep, repair, and smooth operation of assets and equipment.