Joe Is a Warehouse Custodian and Also Maintains the Accounting

question 75

Multiple Choice

Joe is a warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

• A) documentation procedures are violated.
• B) independent internal verification is violated.
• C) segregation of duties is violated.
• D) establishment of responsibility is violated.

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Definitions:

Account Title

The name given to an account in the ledger to identify the type of transactions it records, such as "Sales Revenue" or "Accounts Payable."

Unearned Revenues

Money received by a company for goods or services that have yet to be delivered or performed.

Current Assets

Resources that are anticipated to be turned into cash, disposed of, or utilized within a year or throughout the regular business cycle.

Classified Balance Sheet

A balance sheet that groups together similar assets and liabilities, using several classifications and categories, to provide useful information to the users.