Ron Jones Has Been a Trusted Employee for Over 10

question 75

Multiple Choice

Ron Jones has been a trusted employee for over 10 years.He is responsible for ordering merchandise inventory, receiving the inventory items, and authorizing the payment for these items.Which internal control principle, if any, is being violated?

• A)None, Ron has proven to be trustworthy and has enough experience to do a good job.
• B)Documentation procedures.
• C)Establishment of responsibilities.
• D)Segregation of duties.

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Definitions:

Deposit In Transit

Funds that have been deposited by a company but not yet credited to its bank account.

Ledger

A comprehensive collection of a company's financial accounts.

Petty Cash Fund

A small amount of cash kept on hand by a business for making immediate payments for miscellaneous small expenses.

Journal Entries

The basic means of recording financial transactions in the accounting records, consisting of debits and credits to various accounts.