Control Accounts for Fraud Prevention and Verification

Steps:

• Identify purpose: Control accounts summarize sales/purchases ledgers, enabling reconciliation with detailed records in double-entry system.
• Evaluate statement 1: They facilitate trial balance checks (likely meant "checks," not "employees"), detecting discrepancies that deter fraud.
• Evaluate statement 2: Assigning ledger maintenance to separate employees promotes segregation of duties, reducing fraud risk.
• Evaluate statement 3: Journals remain essential for recording transactions; control accounts supplement, not eliminate them.

Why A is correct:

• A selects 1 and 2 only, aligning with control accounts' role in error detection via reconciliations and fraud prevention through divided responsibilities, per accounting principles.

Why the others are wrong:

• B includes 3, which is false as journals are still required for transaction details.
• C references nonexistent or incorrect 4, omitting valid 2.
• D omits 1 and relies on undefined 4, ignoring key verification benefit.

Final answer: A