Internal Control Activities Within the Purchasing Process, Identified as Segregation

question 33

Multiple Choice

Internal control activities within the purchasing process, identified as segregation of duties, would include all of the following, except:

• A)Responsibility for authorization, custody, and record keeping are to be assigned to different individuals.
• B)Duties related to requisitioning, ordering, purchase approval, receiving, inventory control, accounts payable, and general accounting are to be delegated to separate departments or individuals.
• C)Complete separation of inventory custody from inventory accounting.
• D)Purchasing records and programs must be protected from unauthorized access.

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Definitions:

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Indirect Labor

Labor costs not directly tied to the production of goods or services, such as salaries of supervisors and maintenance staff.

Direct Labor Hours

The cumulative hours expended by workers directly engaged in the manufacturing of products or provision of services.

Static Budget

A budget that remains unchanged regardless of changes in activity levels, sales volume, or other variables during the budget period.