An Internal Control System Consists of the Policies and Procedures

question 145

Multiple Choice

An internal control system consists of the policies and procedures used to accomplish all of the following except:

• A)Protect assets.
• B)Ensure reliable accounting.
• C)Guarantee a return to investors.
• D)Urge adherence to company policies.
• E)Promote efficient operations.

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Definitions:

Lowest Cost of Goods Sold

The minimum expenses incurred in the direct creation of goods available for sale, often achieved through efficient production techniques or cost-cutting measures.

Current Cost

The cost that would be incurred to replace an asset or to purchase a service at the present time, as opposed to its historical cost.

Erratic Changes in Costs

Refers to unpredictable fluctuations in expense levels, which can impact profitability and budgeting in businesses.

Quick Assets

Assets that can be quickly converted into cash, such as marketable securities and receivables, excluding inventory.