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 of the following is NOT accomplished with an internal control system?

Eliminating all risk of fraud and error

Ensuring the reliability of financial reporting

Complying with applicable laws and regulations

Promoting operational efficiency

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Verified step by step guidance

Understand the purpose of an internal control system: Internal controls are processes and procedures implemented by an organization to safeguard assets, ensure accurate financial reporting, comply with laws and regulations, and promote operational efficiency.

Analyze the options provided in the question: Each option represents a potential function or limitation of an internal control system. Carefully evaluate whether each option aligns with the objectives of internal controls.

Recognize the limitations of internal controls: Internal controls are designed to reduce the risk of fraud and error, but they cannot completely eliminate these risks. This is a key limitation of internal control systems.

Compare the options to the limitations: Identify which option explicitly states a limitation that internal controls cannot achieve, such as 'Eliminating all risk of fraud and error.' This option does not align with the realistic capabilities of internal controls.

Conclude that the correct answer is the option that describes a limitation of internal controls, as internal controls cannot eliminate all risks of fraud and error, but they can achieve the other listed objectives.