ABC Automobiles Is Negotiating for a Major Contract to Supply

question 45

Multiple Choice

ABC Automobiles is negotiating for a major contract to supply police cars to Malaysia.However,the Malaysian government wants the firm to take half payment in Malaysian palm oil.The firm should

• A)insist on a buyback.
• B)insist on a switch trade.
• C)raise its proposed price for the contract.
• D)decrease its proposed price for the contract.

Understand the enhancement of internal control through the separation of functional responsibilities.

Identify the procedures and significance of a voucher system in accounting for payables.

Interpret the meaning of the Cash Short and Over account and its implications.

Identify good practices in internal control over cash payments.

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Definitions:

Journal

A book or electronic record where all financial transactions of a business are initially recorded, often before posting to ledgers.

Chronological Record

An organized account of events, transactions, or entries in the order they occurred over time.

Accounts Receivable

Payments yet to be received by a company from customers for goods or services already provided.

Notes Payable

Financial obligations represented by written promissory notes that specify the terms under which a borrower agrees to repay a lender.