Question 13 An objective of internal control is to: Eliminate collusion Prevent

Question

Question 13 An objective of internal control is to: Eliminate collusion Prevent employees from having access to cash Provide 24-hour policing of employees Safeguard the assets 10 points

Question 14 Responsibilities for specific tasks should be defined so: In the case of error, a designated person can be held accountable Employee A knows that he/she does not have to understand how Employee B does his or her job Employees know what the policies and procedures are Management supervision can be eliminated 10 points Question 15 The main purpose of calculating a standard food cost percentage is to: Know in advance what the actual food cost will be Be able to calculate the food cost each day Have a figure against which actual food cost can be compared Be able to calculate in advance what the gross profit will be 10 points

Question 16 Which of the following would not call for a tactical pricing decision? Reacting to a competitor's short-run pricing changes Establishing prices with the firm's long-term financial objectives in mind Knowing what discount to offer to accept group business while still making a profit Adjusting prices to reach a new market segment

Explanation / Answer

13.

the correct option is d) safegaurd the assets.

Explanation

The objectives of setting up internal controls include:

1. safegaurding assets.

2. Detecting and preventing frauds and errors.

3. Ensuring maintenance and proper reporting of financial records.

4. Ensuring less exposure to risks.

The safegaurding of assets results in protection of physical assets like machinery, vehicles etc and monetary assets like cash, loans etc from various threats like fraud, theft/embazzlement and errors.

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