Which of the Following Is an Example of a Preventive

question 92

Multiple Choice

Which of the following is an example of a preventive control?

• A) management level reviews of actual performance versus budgets
• B) credit manager following up on an exception report showing sales made to a customer who has exceeded their credit limit
• C) sales invoices are automatically priced using the information in the price master file
• D) a bank reconciliation

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Definitions:

Loanable Funds

The money available for borrowing, the supply of which is influenced by savings and demand for investment.

Real Interest Rate

The interest rate adjusted for inflation, representing the real cost of borrowing or the real yield on savings.

Real Exchange Rate

The rate at which the goods and services of one country can be exchanged for those of another, adjusted for inflation, reflecting the purchasing power of its currency internationally.

Government Budget Deficit

The financial situation that occurs when a government spends more money than it receives in revenue over a specified period.