Describe the Criteria That Effective Control Systems Should Meet

question 57

Essay

Describe the criteria that effective control systems should meet.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, essentially representing the owner's claim against the company's assets.

Expense

The outflow of resources such as cash and other valuables, incurred in the process of generating revenues.

Supplies

Materials and items used in the operation of a business but not directly tied to a final product or service.

Ending Capital

The total value of an entity’s equity at the end of an accounting period after accounting for income and withdrawals.