What are some of the limitations on a company's effective system of internal control?
There are a number of limitations on the efficiency of internal control. First, a system of internal control is not cost free. For example, the segregation of duties may require a larger staff than would otherwise be necessary. An internal audit staff may be too costly for a small company. Second, no system of internal control can prevent collusion by two or more employees. Third, the lack of support from upper management may weaken an otherwise strong commitment to a system of internal control. Finally, the element of human error can never be eliminated in any operation, regardless of how big or small.
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Mary has recently hired a new employee and is beginning job instructional training (JIT). She made him feel at ease, showed him what to do a few times while explaining it, and then gave him some people he can reach out to in the case of any questions. She then proceeded to monitor his work to ensure the quality. What step of JIT did Mary miss?
a. yelling him when he is allowed to take breaks b. allowing the trainee to complete the work while he explains all the steps c. telling him what he was doing wrong d. including other employees in the training process
The steps in the accounting process focus on analyzing and recording financial transactions and events within a company. Those steps are shown below. Using the number system of 1 as the first step and 4 as the last step in the process, number the steps in the correct order in which they would occur (1 thru 4). _____ Analyze transactions using the accounting equation. _____ Record journal entry. _____ Post entry to ledger._____ Identify transactions and source documents.
What will be an ideal response?
Twenty years ago, Mrs. Cole purchased an insurance policy on her own life. Mrs. Cole died this year, and the policy paid the $300,000 death benefit to her son Jeffrey. During her life, Mrs. Cole paid total premiums of $71,200 on the policy. Which of the following statements is true?
A. Jeffrey must recognize $228,800 of the $300,000 payment as ordinary income. B. Jeffrey must recognize $228,800 of the $300,000 payment as capital gain. C. Jeffrey must recognize the $300,000 payment as ordinary income. D. Jeffrey can exclude the $300,000 payment from gross income.
A random sample of 100 people was taken. Eighty of the people in the sample favored Candidate A. We are interested in determining whether or not the proportion of the population in favor of Candidate A is significantly more than 75%. The test statistic is _____
a. .80 b. .05 c. 1.25 d. 2.00