An Internal Control System Consists of the Policies and Procedures

question 169

Multiple Choice

An internal control system consists of the policies and procedures managers use to do all of the following except:

• A) Urge adherence to company policies.
• B) Promote efficient operations.
• C) Ensure reliable accounting.
• D) Determine pricing for products.
• E) Protect assets.

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Definitions:

Capital Expenditures

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Additions

Refers to increases or expenses added to a specific account, often relating to assets like buildings or equipment.

Extraordinary Repairs

Infrequent expenditures that extend an asset’s life (such as a new engine in a car).

Betterments

Improvements that increase the efficiency of an asset by adding accessories or replacing parts with more effective/powerful ones.