Poor Controls Over Credit Limit Approval or in Changing the Credit

question 60

Multiple Choice

Poor controls over credit limit approval or in changing the credit limit in the master file may result in

• A)confused and frustrated customers.
• B)incomplete sales records.
• C)financial statement errors for sales and AR accounts.
• D)excessive bad debts and uncollectible accounts receivable.

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Definitions:

Barter

The direct exchange of goods or services for other goods or services without the use of money.

Benevolence

The quality of being well-meaning and kindly; a desire to help others.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one could have received by taking the alternative action.

Manufacturing

The process of converting raw materials or components into finished goods through the use of tools, human labor, machinery, and chemical processing.