Important Elements of an Internal Control System for Cash Disbursements

question 33

Multiple Choice

Important elements of an internal control system for cash disbursements include each of the following except:

• A)Only authorized personnel should sign checks.
• B)All expenditures should be authorized before a check is prepared.
• C)All disbursements, other than very small disbursements, should be made by check.
• D)The same person that prepares the check should also record it the proper journal.

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Definitions:

Product Price

The financial outlay necessary to acquire a certain item or service.

Competitive Firm

A business that operates in a market where it has multiple competitors, and no single firm can influence the market price of goods or services.

Short Run

A time period in economics where at least one input is fixed, restricting the ability to adjust production levels fully.

Long Run

A timeframe during which all production factors and expenses can change, permitting adjustments to all inputs.