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:

Contribution Format

A form of income statement where costs are divided into variable and fixed, and the contribution margin is calculated to determine profitability.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, displaying revenue, expenses, and profit or loss.

Net Operating Income

An essential metric showing the profitability of a company's core business activities, excluding the effects of financing and investment income.

Variable Cost

Expenses that change in proportion to the amount of goods or services produced.