A Good System of Internal Control Will Include All of the Following

question 51

Multiple Choice

A good system of internal control will include all of the following except:

• A)Preparing a pro-forma financial statement on a monthly basis.
• B)Separating the handling of cash from the maintenance of accounting records.
• C)Making all major payments by check.
• D)Reconciling bank statements with accounting records.

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Definitions:

Dependent

Dependent is a person, typically a child or elderly family member, whose support and maintenance are provided by another, qualifying the supporting individual for certain tax benefits.

Pease Limitations

Named after Congressman Don Pease, these are limits on the amount of itemized deductions that high-income individuals can claim.

Itemized Deductions

Expenses allowed by the IRS that can be deducted from adjusted gross income to reduce taxable income if chosen instead of the standard deduction.

AGI

Adjusted Gross Income refers to the total income reduced by certain deductions to ascertain the tax obligation.