What Risks Are Eliminated Through the Use of Electronic Funds

question 39

Multiple Choice

What risks are eliminated through the use of electronic funds transfers directly to bank or establishing a lockbox arrangement with the bank?

• A)Mail receipts lost or misappropriated after receipt
• B)Cash not deposited intact daily
• C)Inappropriate cash discounts taken by customers

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Definitions:

Next Processing Department

The subsequent department or phase in a manufacturing process that a product or material moves to after the current processing.

First Processing Department

is the initial stage or department in a manufacturing process where the raw materials start their transformation into finished goods.

Step-Down Method

A cost allocation method used in managerial accounting that allocates service department costs to other parts of an organization, including production departments.

Service Department Costs

Expenses incurred by support departments within a company, such as maintenance and administration, which do not directly produce goods or services but are necessary for operations.