The Limitation of Internal Control Includes All of the Following

question 37

Multiple Choice

The limitation of internal control includes all of the following except:

• A) collusion.
• B) the size of the entity.
• C) human nature.
• D) separation of record keeping and custodianship.

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Definitions:

Contingent Consideration

An obligation of a buyer to transfer additional assets or equity interests to the seller after meeting certain conditions post-acquisition.

Liabilities

Liabilities are financial obligations or debts that a company owes to others, which are expected to be paid in the future.

Investment Account

An account designated for holding a portfolio of investments, such as stocks, bonds, real estate, and mutual funds, different from a standard savings account.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but kept for reinvestment in the business or to pay off debt.