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Chapter 34 – Solutions

Multiple Choice Solutions​

  1. c) Internal controls aim to safeguard assets, ensure accuracy, promote efficiency, ensure compliance, and prevent fraud.

  2. b) Segregation of duties separates authorization, recording, custody, and reconciliation.

  3. c) Bank reconciliation should be performed monthly (minimum).

  4. b) Compensating controls are additional controls that compensate for lack of segregation.

  5. b) Preventive controls prevent errors from occurring.

  6. b) Petty cash should be a fixed amount.

  7. c) Inventory counts should be performed regularly (monthly, quarterly, annually).

  8. b) Aging analysis helps identify overdue accounts and prioritize collection.

  9. b) Purchase orders help authorize purchases and prevent unauthorized payments.

  10. b) Whistleblower protections are required for companies with 50+ employees (as of 2025).

Note: Complete solutions for Problems Set A, Set B, and Comprehensive Problem are available in the instructor solutions manual.

End of Chapter 34 Solutions