The Sales Department Bookkeeper Has Been Crediting House?account Sales to Her

question 3

Multiple Choice

The sales department bookkeeper has been crediting house?account sales to her brother-in?law, an outside salesman.Commissions are paid on outside sales but not on house-account sales.This might have been prevented by requiring that:

• A)Sales order forms be prenumbered and accounted for by the sales department bookkeeper
• B)Sales commission statements be supported by sales order forms and approved by the sales manager
• C)Aggregate sales entries be prepared by the general accounting department
• D)Disbursement vouchers for sales commissions be reviewed by the internal audit department and checked to sales commission statements
• In each one of the following four questions (questions 50?53), you are given a well?recognized procedure of internal control.You are to identify the irregularity that will be discovered or prevented by each procedure.

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Definitions:

Full Employment GDP

The maximum output that an economy can produce without causing inflation, when all available resources are utilized efficiently.

Keynes

From the UK, this economist's theories ushered in a new era for macroeconomic practice and governmental economic policy-making.

The Classicals

Economists from the 18th and 19th centuries who laid the foundations of classical economics, focusing on free markets and self-regulating economies.

Say's Law

An economic theory that proposes that supply creates its own demand, suggesting that production is the source of demand and that markets naturally balance over time.