Having One Person Responsible for the Related Activities of Ordering

question 13

Multiple Choice

Having one person responsible for the related activities of ordering merchandise receiving goods and paying for them

• A) increases the potential for errors and fraud.
• B) decreases the potential for errors and fraud.
• C) is an example of good internal control.
• D) is a good example of safeguarding the company's assets.

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Definitions:

Bolts

Fasteners consisting of a head and a cylindrical body with screw threads used to hold objects together.

Lot-For-Lot

An inventory policy where the order quantity is set to match the exact demand for the coming period, minimizing holding costs.

Setup Cost

Setup cost is the expense incurred to prepare equipment, machines, or systems for a manufacturing run or production operation.

Inventory Holding Cost

The total cost associated with storing unsold goods, including warehousing, depreciation, insurance, and opportunity costs.