When an Entity Receives Mail Receipts, It Is Preferable to Have

question 6

Multiple Choice

When an entity receives mail receipts, it is preferable to have at least two clerks responsible for opening the mail. This control

• A) ensures both clerks are punctual.
• B) reduces the risk of cash receipts received in the mail being misappropriated.
• C) ensures receipts are processed to the appropriate general ledger account.
• D) ensures all cheques received are accompanied by a remittance advice.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Common Stock

Equities, or equity securities, issued as ownership shares in a publicly held corporation. Shareholders have voting rights and may receive dividends based on their proportionate ownership.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

ROE

Equity Return, which is determined by dividing the net income by the equity of shareholders, is a method used to evaluate financial success.