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

Managers use an internal control system primarily to:

Safeguard assets and ensure the reliability of financial reporting

Increase company profits through aggressive sales tactics

Eliminate the need for external audits

Reduce the number of employees required in the organization

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Verified step by step guidance

Understand the concept of internal control systems: Internal control systems are processes and procedures implemented by an organization to safeguard its assets, ensure the accuracy and reliability of financial reporting, and promote operational efficiency.

Analyze the purpose of internal control systems: The primary goal is to protect the organization's resources, prevent fraud, and ensure compliance with laws and regulations. It is not directly aimed at increasing profits or reducing the workforce.

Evaluate the options provided: Review each option to determine which aligns with the primary purpose of internal control systems. For example, aggressive sales tactics and reducing employees are not related to safeguarding assets or ensuring reliable financial reporting.

Focus on the correct purpose: Internal control systems are designed to safeguard assets and ensure the reliability of financial reporting, which is essential for accurate decision-making and maintaining stakeholder trust.

Conclude the correct answer: Based on the analysis, the correct answer is the option that aligns with the primary purpose of internal control systems, which is 'Safeguard assets and ensure the reliability of financial reporting.'