Each Category of Processes in the Typical Purchasing System Would

question 7

Multiple Choice

Each category of processes in the typical purchasing system would include controls and risks.For each of the categories, the goal of the internal controls system is to reduce specific types of business risks.Which of the following is not one of those risks?

• A)Recording invalid transactions
• B)Recording transactions at the wrong amounts
• C)Omitting actual transactions from the accounting records
• D)Transactions properly accumulated or transferred to the correct accounting records

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Definitions:

Colluding Firms

Companies that agree, often covertly, to work together, typically to set prices or market conditions, in order to reduce competition.

Cost Function

A mathematical expression that calculates the total cost of producing a certain number of goods or services.

Market Demand

The aggregate quantity of a good or service that all consumers in a market are willing and able to purchase at different prices.

Stackelberg Leader

The Stackelberg leader refers to the dominant firm in a duopoly that makes its production decision first, thereby influencing the market actions of the following competitor.