If the Same Employee Is Responsible for Authorizing a Business

question 60

Multiple Choice

If the same employee is responsible for authorizing a business transaction and recording the transaction in the accounting records, this indicates a weakness in which element of a company's internal control system?

• A)A good audit trail
• B)Separation of duties
• C)Internal review of controls
• D)Competent employees

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Definitions:

Buildings

Assets classified in accounting as long-term or fixed assets, representing structures owned by a company for business use.

Return On Assets

A profitability ratio that measures how efficiently a company uses its assets to generate profit, calculated as net income divided by total assets.

Asset Turnover

A ratio that measures the efficiency of a company's use of its assets in generating sales revenue.

Financial Statement Presentation

The method of organizing and presenting financial data of a company in its financial statements, according to accounting standards.