Segregation of Duties Has an Important Role in Providing for Good

question 18

Multiple Choice

Segregation of duties has an important role in providing for good quality internal controls.Which of the following segregation of duties improve controls over the inventory and distribution cycle?

• A)The purchasing department should not be responsible for updating the economic order quantity.
• B)The accounting staff should not be responsible for the data entry of vendor invoice detail.
• C)The inventory transaction processing systems should not be accessible to the receiving department.
• D)The purchasing department should not be responsible for authorizing the acquisition of or receiving the goods.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a specific price.

Market Equilibrium

A situation in a market where the quantity of a product demanded by consumers equals the quantity supplied by producers.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, typically set below the equilibrium price.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a particular price.