The Control Principle Related to Not Having the Same Person

question 124

Multiple Choice

The control principle related to not having the same person authorize and pay for goods is known as

• A)establishment of responsibility.
• B)independent internal verification.
• C)segregation of duties.
• D)rotation of duties.

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Definitions:

Operating Cycle

The period between the acquisition of inventory and the collection of cash from receivables, indicating the efficiency of a company's operations.

Inventory Period

The duration of time goods remain in inventory before being sold.

Accounts Receivable Period

The accounts receivable period is the average time it takes for a business to receive payments owed by its customers for goods or services sold on credit.

Cash Cycle

This term describes the time it takes for a business to convert its investments in inventory and other resources into cash flows from sales.