Internal Controls Related to the Purchase Returns Would Include All

question 85

Multiple Choice

Internal controls related to the purchase returns would include all of the following, except:

• A)The accounts payable employee who prepares the debit memo should also be responsible for handling the inventory and approving the return.
• B)Special authorization should be required to officially reject and return the items.
• C)Debit memos should be issued on pre-numbered forms in numerical sequence.
• D)Accounts payable records and data files should be restricted to those who are specifically authorized to approve or record the related purchase return.

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Definitions:

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The ratio of a company's annual dividends to its share price, indicating the earnings a shareholder gets for each share held.

Capital Loss

A decrease in the value of an investment or asset from its purchase price.

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Tobacco Company

A company that produces and sells tobacco products, such as cigarettes, cigars, and pipe tobacco.