Internal Controls Related to the Purchase Returns Would Include All

question 64

Multiple Choice

Internal controls related to the purchase returns would include all of the following, except:

• A)The accounts payable employee who prepares the debit memo should also be responsible for handling the inventory and approving the return.
• B)Special authorization should be required to officially reject and return the items.
• C)Debit memos should be issued on pre-numbered forms in numerical sequence.
• D)Accounts payable records and data files should be restricted to those who are specifically authorized to approve or record the related purchase return.

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Definitions:

Liability Accounts

Accounts on a company's balance sheet that represent what it owes to others, such as loans, accounts payable, mortgages, deferred revenues, bonds, warranties, and accrued expenses.

Trial Balance

A financial report that lists all the active accounts and their balances at a certain point in time, used to verify the equality of debits and credits in the accounting system.

Reports Center

A centralized hub or platform where various types of reports, such as financial and analytical, are generated and accessed.

Accountant & Taxes

The area of finance that involves the management of tax-related activities and compliance, overseen by accounting professionals.