Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A) Preventing errors during processing should not be an important objective of every accounting system.
• B) Preventive controls can be applied to each transaction during normal processing to avoid errors occurring.
• C) To be effective, controls over transactions should only include detective controls.
• D) The purpose of preventive controls is to discover fraud or errors that may have occurred during transaction processing.

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Definitions:

Journal Entry

A record in accounting that represents each transaction with debits and credits in financial accounts.

Plant Assets

Long-term tangible assets that are used in the production of goods or services and are not intended for resale, including buildings, machinery, and equipment.

Double-Declining Balance

An accelerated method of depreciation where an asset loses value at double the rate of traditional straight-line depreciation.

Depreciation Method

An accounting technique used to allocate the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.