Internal Control Over Financial Reporting Includes Each of the Following

question 35

Multiple Choice

Internal control over financial reporting includes each of the following elements except for:

• A) Maintaining accurate financial records
• B) Providing reasonable assurance that receipts and expenditures are recorded based on proper authorization by management
• C) External audit conducted in accordance with generally accepted auditing standards
• D) Adhering to company policies and procedures

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Definitions:

MPC

Marginal Propensity to Consume, which indicates the fraction of additional income that a household is likely to spend on consumption.

Contractionary Fiscal Policy

Economic measures employed by a government to reduce its expenditures or increase taxes with the aim of slowing down an overheated economy.

Potential Output

The highest level of real gross domestic product (GDP) that can be sustained over the long term without increasing inflation, reflecting the maximum productive capacity of an economy.

Short-Run Aggregate Supply

The total production of goods and services in an economy at different price levels in the short-term, considering wages and resource prices as sticky.