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 best describes the goal of internal controls?

To maximize profits by reducing all expenses to zero.

To provide reasonable assurance regarding the achievement of an organization's objectives in operations, reporting, and compliance.

To eliminate all risks and errors within an organization.

To ensure that only top management is responsible for financial reporting.

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Verified step by step guidance

Understand the concept of internal controls: Internal controls are processes and procedures implemented by an organization to ensure the reliability of financial reporting, compliance with laws and regulations, and efficient operations.

Clarify the goal of internal controls: The goal is not to eliminate all risks or errors, as this is impractical, but rather to provide reasonable assurance that the organization's objectives in operations, reporting, and compliance are achieved.

Evaluate the options provided: Analyze each option to determine which aligns with the definition and purpose of internal controls. For example, maximizing profits or eliminating all risks are not realistic goals of internal controls.

Focus on the correct answer: The correct answer should emphasize reasonable assurance and the achievement of objectives in operations, reporting, and compliance, as this is the widely accepted purpose of internal controls.

Conclude by reinforcing the importance of internal controls: Highlight that internal controls are essential for safeguarding assets, ensuring accurate financial reporting, and promoting adherence to laws and regulations.