Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

Financial Accounting

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

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Multiple Choice

An internal control system is used to do all of the following EXCEPT:

Guarantee company profitability

Safeguard company assets

Ensure the accuracy and reliability of accounting records

Promote operational efficiency

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Verified step by step guidance

Understand the concept of an internal control system: Internal control systems are processes and procedures implemented by a company to ensure the integrity of financial and accounting information, promote operational efficiency, and safeguard assets.

Review the primary objectives of internal control systems: These include safeguarding company assets, ensuring the accuracy and reliability of accounting records, and promoting operational efficiency.

Identify the exception in the question: Internal control systems are not designed to guarantee company profitability. Profitability depends on various external and internal factors, such as market conditions, business strategies, and operational performance, which are beyond the scope of internal controls.

Compare the listed options: Safeguarding assets, ensuring accurate accounting records, and promoting operational efficiency are all valid objectives of internal control systems. Guaranteeing profitability is not a function of internal controls.

Conclude that the correct answer is 'Guarantee company profitability,' as it does not align with the primary objectives of an internal control system.