Having One Person Responsible for the Related Activities of Ordering

question 26

Multiple Choice

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

• A)increases the potential for errors and fraud.
• B)decreases the potential for errors and fraud.
• C)is an example of good internal control.
• D)is a good example of safeguarding the company's assets.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Production Sector

A segment of the economy that includes the activities involving the manufacturing and production of goods.

Consumption Sector

Part of the economy that involves the purchase of goods and services by individuals and households.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true yield on an investment.