R Budd, the Purchasing Agent of Lake Hardware Wholesalers, Has

question 97

Multiple Choice

R. Budd, the purchasing agent of Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a cash-on-delivery (COD) basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over

• A)purchase requisitions.
• B)cash receipts.
• C)perpetual inventory records.
• D)purchase orders.

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Definitions:

Legal Obligations

Duties that are enforceable by law, arising from statutes, contracts, or legal principles.

Valid Contracts

Agreements that meet all legal requirements, including offer, acceptance, consideration, and legality, making them enforceable in court.

Unenforceable Contracts

Agreements that, due to legal deficiencies, cannot be upheld or enforced by the courts.

Void Contracts

Agreements that are illegal or against public policy and therefore unenforceable by law.