Final answer:
To limit losses, companies need to implement proper internal controls over their valuable assets. Collectibles can serve as tangible assets but aren't reliable for long-term above-average returns. Money serves as a store of value, retaining worth over time despite inflation.
Step-by-step explanation:
To limit losses, companies should establish adequate internal controls over valuable assets. For instance, inventory, which is considered a valuable asset, should be kept securely in a storeroom and not released without proper authorization. Internal controls are crucial to safeguard assets, ensure accurate reporting, and promote operational efficiency.
Similarly, tangible assets like collectibles, including paintings, fine wine, jewelry, antiques, or even baseball cards, serve as both a source of enjoyment and a potential investment. These items can provide returns in the form of services, or a potentially higher selling price in the future. That said, while they may occasionally experience price increases, they should not be relied upon for a higher-than-average rate of return over a long period. This is important to consider when setting up controls and managing asset value expectations.
Furthermore, the concept of money as a store of value underlines its importance in the economic system. Money ideally retains its value over time, unlike bartered goods which can lose value, such as shoes that go out of style. Although money may lose some purchasing power due to inflation, it remains a relatively stable asset compared to other forms of trade.