Which of the Following Is Not a Principle of Internal

question 10

Multiple Choice

Which of the following is not a principle of internal control?

• A) Establishing clear lines of responsibility
• B) Division of responsibility for related transactions
• C) Separation of record keeping and custody of assets
• D) Placing excess cash on fixed deposit to earn interest

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Definitions:

Primary Liability

The direct and immediate responsibility to fulfill an obligation or repay a debt, without necessarily having recourse against others for reimbursement.

Secondary Liability

Secondary Liability refers to the legal responsibility of a third-party for the actions of another, such as a parent company being liable for the actions of its subsidiary.

Party Authority

The legal power or capacity of a party to enter into a binding contract or agreement.

Act On Behalf

The action of representing or making decisions for someone else or another entity.