When Classifying Risks, Significant Consideration Is Not Given to Whether

question 56

Multiple Choice

When classifying risks, significant consideration is not given to whether the risk

• A) is related to significant economic or accounting developments.
• B) involves simple transactions.
• C) involves significant related party transactions.
• D) involves fraud.

---

Definitions:

Petty Cash System

A method used by businesses to manage small, daily expenses, involving a small store of cash on hand.

Cash Payments

Financial activities that result in the spending of cash to fulfill debts or acquire products and services.

Bank Reconciliation

The process of matching and comparing figures from accounting records against those shown on a bank statement to ensure they are in agreement.

Journal Entries

Records that document financial transactions in an accounting system, indicating the accounts and amounts to be debited and credited.