The Following Set of Items Describes Activities Completed by a Company

question 126

Multiple Choice

The following set of items describes activities completed by a company in purchasing and paying for merchandise and in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. (Choices may be used more than once.)
-A mailroom employee opens the mail, counts the money received, and updates the accounting records for the amount received.

• A)Adheres to sound internal controls
• B)Violates sound internal controls
• C)Neither strengthens nor violates internal control

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Definitions:

Secondary Liability

Legal responsibility imposed on a party for the actions of another, based on a relationship or specific circumstances.

Unconditionally Promise

A commitment made without any stipulations or requirements, offering a guarantee without any terms for fulfillment.

Notice Of Dishonor

A formal notification indicating that a negotiable instrument, like a check, has been dishonored or refused for payment.

Revised Article 3

Part of the Uniform Commercial Code that governs negotiable instruments, such as checks and promissory notes, incorporating updates to reflect modern practices.