The Duties of Approving an Item for Payment and Paying

question 142

True/False

The duties of approving an item for payment and paying for the item should be done by different departments or individuals.

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Definitions:

Lower of Cost

An accounting principle that values inventory at the lower of its historical cost or the current market value.

Net Realizable Value

The estimated selling price in the ordinary course of business, less any costs of completion, disposal, and transportation.

Cost of Goods Sold

The immediate expenses related to manufacturing the products a company sells, which consist of materials and labor.

Inventory

The tangible property held for sale in the normal course of business, or to be used in producing goods or services.