The Separation of Ownership from Managerial Control of a Firm

question 97

True/False

The separation of ownership from managerial control of a firm is known as the agency problem.

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Definitions:

Bank Reconciliation

The process of matching and comparing figures from accounting records against those presented on a bank statement to ensure accuracy.

Voucher System

A method of internal business control that involves a documented process for making disbursements and controlling expenditures.

Invoice Approval

The process of reviewing and verifying an invoice before it is paid to ensure that the charges are accurate and the goods or services were received.

Petty Cash Reimbursement

The process of refilling the petty cash fund to its set level after its funds have been used for small, incidental expenses.