The Lumber Mart Recently Replaced Its Management Team

question 33

Multiple Choice

The Lumber Mart recently replaced its management team.As a result,the firm is implementing a restrictive short-term policy in place of the flexible policy under which the firm had been operating.Which of the following should the employees expect as a result of this policy change?
I.reduction in sales due to stock outs
II.greater inventory selection
III.decreased sales due to the new accounts receivable credit policy
IV.decreased investment in marketable securities

• A)I and II only
• B)II and IV only
• C)I, II, and IV only
• D)I, III, and IV only
• E)I, II, III, and IV

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Definitions:

Pre-numbered

Pre-numbered refers to documents or forms that are sequentially numbered in advance, aimed at preventing fraud and ensuring completeness in record-keeping.

Internal Control

Mechanisms and steps a firm takes to confirm the trustworthiness of its financial and accounting reports, enhance accountability, and stop fraudulence.

Controls

Procedures or policies implemented by a company to safeguard its assets, enhance the reliability of its accounting records, increase efficiency, and ensure compliance with laws and regulations.

NSF Check

a check that has been returned by a bank because the account it was drawn on does not have sufficient funds.