Which of the Following Internal Control Procedures Most Likely Addresses

question 868

Multiple Choice

Which of the following internal control procedures most likely addresses the completeness assertion for inventory?

• A) Work in process account is periodically reconciled with subsidiary records.
• B) Employees responsible for custody of finished goods do not perform the receiving function.
• C) Receiving reports are prenumbered and periodically reconciled.
• D) There is a separation of duties between payroll department and inventory accounting personnel.

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Definitions:

Due Date

The final day an invoice is to be paid. After that day the buyer may be charged interest. Also, the date by which a loan is to be repaid.

Remittance

Amount that a buyer actually pays after deducting a cash discount.

Discount Period

A certain number of days after the invoice date, during which a buyer may receive a cash discount. The time between a note’s discount date and its maturity date.

Trade Discount

A reduction in price given by a seller to a buyer, usually based on the quantity purchased or agreed upon terms, not reflected in the invoice amount.