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

Which component of internal control is primarily designed to discourage security violations before they occur?

Control Environment

Preventive Controls

Detective Controls

Corrective Controls

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Verified step by step guidance

Understand the concept of internal control: Internal control refers to the processes and mechanisms implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud or errors.

Learn about the types of controls: Internal controls are categorized into preventive, detective, and corrective controls. Preventive controls are designed to stop issues before they occur, detective controls identify issues after they happen, and corrective controls address and fix identified issues.

Focus on preventive controls: Preventive controls are proactive measures aimed at discouraging or stopping security violations before they occur. Examples include access controls, authorization procedures, and employee training.

Compare the options provided: Control Environment refers to the overall tone and culture of the organization regarding internal control, but it is not specifically designed to prevent violations. Detective Controls identify violations after they occur, and Corrective Controls address violations after detection. Preventive Controls are explicitly designed to discourage violations before they happen.

Conclude that Preventive Controls are the correct answer: Based on the definitions and purposes of the control types, Preventive Controls are primarily designed to discourage security violations before they occur.