Having One Person Responsible for the Related Activities of Ordering

question 73

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 a control activity.
• D) reduces cost and maximizes benefit.

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Definitions:

Long Term Investments

Investments not expected to be sold or converted into cash within the next year, including stocks, bonds, and real estate.

Fair Value

The estimated price at which an asset or liability could be traded in a fair transaction between knowledgeable, willing parties under no force of sale.

Identifiable Net Assets Method

A technique used in business combinations that involves valuing a company based on the fair value of its identifiable net assets, excluding goodwill.

Fair Value Enterprise Method

A method of valuing a business by estimating the price at which the entire enterprise could be sold in a current market transaction.