Which of the following is not a goal of a system of internal control over merchandising transactions?
A)Keep credit losses as low as possible.
B)Prevent the theft of cash and inventory.
C)Keep the maximum amount of inventory on hand at all times.
D)Keep enough cash on hand to take advantage of purchase discounts.

Question

Quizplus · Accepted Answer

Keeping the maximum amount of inventory on hand at all times is not a goal of internal control over merchandising transactions. In fact, excessive inventory can lead to increased costs and decreased cash flow. The goals of internal control over merchandising transactions are to prevent credit losses, prevent theft of cash and inventory, and ensure that there is enough cash on hand to take advantage of purchase discounts.

Which of the Following Is Not a Goal of a System