Which of the following statements concerning internal control is true?

Question

Quizplus · Accepted Answer

Double entry accounting is a method of internal control that ensures accuracy and completeness of financial transactions by recording them twice, once as a debit and once as a credit. However, it does not eliminate the possibility of fraud entirely.

Note: B is incorrect because while strong internal controls can reduce the risk of fraud, it cannot eliminate it entirely. C is incorrect because physical counts of inventory are a critical component of internal control procedures for managing and tracking inventory. D is incorrect because paying accounts out of unbanked receipts without proper documentation is a violation of internal controls as it can lead to errors and fraud.

Which of the Following Statements Concerning Internal Control Is True