Principles of internal control include:
A) Record purchases using the gross method.
B) Divide responsibilities for related transactions.
C) Perform regular and independent reviews.
D) Divide responsibilities for related transactions and perform regular and independent reviews.
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

Principles of internal control include dividing responsibilities for related transactions and performing regular and independent reviews to ensure accuracy and prevent fraud or errors. Additionally, recording purchases using the gross method is a specific accounting technique that may or may not be appropriate depending on the circumstances. Therefore, choice A is incorrect. Choice B is partially correct but does not include the necessary review component. Choice C is also correct but only mentions the review component and not the division of responsibilities. Therefore, the best choice is D, which includes both principles of internal control mentioned in this question.

Principles of Internal Control Include