1.
Concept Introduction:
Internal
Whether the statement is true or false.
1.
Answer to Problem 1QS
This statement is true.
Explanation of Solution
Separation of duties is an internal control that suggests dividing the responsibilities for related transactions, given that separating the record-keeping for assets from the safekeeping of assets is an example of separation of duties and helps reduce fraud, thus the statement is true.
2.
Concept Introduction:
Internal control system: This is a set of policies and procedures used by managers to protect assets, encourage effective operations, ensure reliable record keeping, and support the policies of the company. Managers use an internal control system to prevent avoidable losses, plan operations of the business, and monitor company and employee performance.
Whether the statement is true or false.
2.
Answer to Problem 1QS
This statement is false.
Explanation of Solution
The primary objective of internal control is to safeguard the business, from fraud and errors it does not mean safeguarding from government agencies, thus the statement is false.
3.
Concept Introduction:
Internal control system: This is a set of policies and procedures used by managers to protect assets, encourage effective operations, ensure reliable record keeping, and support the policies of the company. Managers use an internal control system to prevent avoidable losses, plan operations of the business, and monitor company and employee performance.
Whether the statement is true or false.
3.
Answer to Problem 1QS
This statement is true.
Explanation of Solution
Internal control is used to protect business assets promote efficient operations, ensure reliable record keeping and uphold company policies, thus protect assets and efficient operations means to protect from wastage and theft, thus the statement is true.
4.
Concept Introduction:
Internal control system: This is a set of policies and procedures used by managers to protect assets, encourage effective operations, ensure reliable record keeping, and support the policies of the company. Managers use an internal control system to prevent avoidable losses, plan operations of the business, and monitor company and employee performance.
Whether the statement is true or false.
4.
Answer to Problem 1QS
This statement is false.
Explanation of Solution
Separation of duties between two or more persons is meant to minimize the chances of fraud, thus the statement is false.
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Chapter 6 Solutions
FINANCIAL&MANAGERIAL ACCT.-CONNECT ONLY
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