A Client's Purchasing System Ends with the Recording of a Liability

question 101

Multiple Choice

A client's purchasing system ends with the recording of a liability and its eventual payment. Which of the following best describes auditors' primary concern with respect to liabilities resulting from the purchasing system?

• A)Accounts payable are not materially understated.
• B)Authority to incur liabilities is restricted to one designated person.
• C)Acquisition of materials is not made from one vendor or one group of vendors.
• D)Commitments for all purchases are made only after established competitive bidding procedures are followed.

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Definitions:

Marketing Strategy

A marketing strategy is a business's overall game plan for reaching prospective consumers and turning them into customers of their products or services.

Current Products

Goods or services that are being manufactured or sold right now, reflecting the latest designs, features, or technology.

International Markets

Marketplaces that extend beyond national borders, where businesses can trade goods and services across countries.

Market Development

A growth strategy where a business seeks to sell its existing products or services into new geographic areas or markets to attract new customers.