Which Internal Control Procedure Is Followed When Management Authorizes the Purchasing

question 98

Multiple Choice

Which internal control procedure is followed when management authorizes the purchasing department to order goods and services for the company?

• A) Segregation of duties
• B) Safeguarding of assets and records
• C) Independent verifications
• D) Proper authorizations

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Definitions:

Consignment Goods

Goods that are given to a third party to sell, but ownership remains with the supplier until the goods are sold.

Consignee

A consignee is the individual or entity to whom goods are shipped to be sold or cared for, but the ownership of those goods remains with the consignor until sold.

Inventory Reporting

The process of documenting the quantity and value of a company's stock of goods.

FOB Destination

A shipping term indicating that the seller retains ownership and responsibility for the goods until they are delivered to the buyer's specified location.