Which of the Following Statements Concerning Internal Control Is True

question 7

Multiple Choice

Which of the following statements concerning internal control is true?

• A) Double entry accounting is an internal control.
• B) Fraud will be eliminated by good internal control practices.
• C) Physical counts of stock on hand are not part of internal control procedures.
• D) It is OK to pay accounts out of unbanked receipts as long as a note is made of what has occurred.

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Definitions:

Representativeness

A cognitive bias in decision making where the likelihood of an occurrence is evaluated based on how similar it is to stereotypes or typical cases.

Anchoring Bias

A mental shortcut in which a person gives disproportionate weight to the first piece of information they receive (known as the "anchor") during decision-making processes.

Anchoring And Adjustment

Anchoring and adjustment is a cognitive bias in decision-making where an initial piece of information, the "anchor," heavily influences subsequent judgments and adjustments.

Creativity

The use of imagination or original ideas to create something; inventiveness.