Plant and Equipment Are Not as Inherently Risky as Are

question 8

Essay

Plant and equipment are not as inherently risky as are other assets,such as inventories and accounts receivable.However,a company should still endeavor to maintain effective internal control over plant and equipment.
a.Describe the principal purpose of internal controls relating to plant and equipment.
b.List and describe four major controls applicable to plant and equipment.

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Definitions:

Educational Credit Management Corporation

A nonprofit organization that specializes in helping student loan borrowers manage their debts and navigate the complexities of the student loan system.

Priority Claims

In bankruptcy proceedings, debts that are entitled to be paid before other debts due to their importance as determined by law.

Secured Creditors

Creditors who have a legal claim or lien on a debtor's asset, providing them safety in case the debtor fails to fulfill their obligations.

Bankrupt

Describes a legal status of a person or entity that cannot repay the debts it owes to creditors, leading to legal proceedings for debt relief.