A Material Weakness in Internal Control Is a Deficiency in the Design

question 59

True/False

A material weakness in internal control is a deficiency in the design or operation of the control that adversely affects the company's ability to initiate,record,process or report external financial data reliably in accordance with GAAP.

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Definitions:

Posting

The process of transferring information from the journal to individual accounts in the ledger, which helps in preparing financial statements.

Journal

A book or digital record where all financial transactions of a business are initially recorded before being transferred to specific accounts in the ledger.

Ledger Accounts

Reflects a record of all the financial transactions made by a company, summarized into different categories for reporting purposes.

Accounts Receivable

Amounts owed by customers to an enterprise for goods or services that have been dispatched but not yet reimbursed.