Separation of Duties Refers To

question 128

Multiple Choice

Separation of duties refers to:

• A)Making each manager personally responsible for his/her department.
• B)Keeping functions across different departments separate.
• C)Preventing top management and lower-level employees from interacting.
• D)Individuals who have physical responsibility for assets should not also have access to accounting records.

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Definitions:

Treasury Stock

Shares that were once part of the outstanding shares of a company but were later reacquired and are held in the company’s treasury.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership of a fraction of a corporation, entitling the holder to a share of the company's profits.

Retained Earnings

Refers to the portion of net income left over for the business after it has paid out dividends to its shareholders.

Net Income

The profit a company generates after all expenses, taxes, and costs have been subtracted from total revenue.