An Internal Control Benefit of Centralized Purchasing in an Organization

question 62

Multiple Choice

An internal control benefit of centralized purchasing in an organization includes which of the following?

• A) Separation of authorization from the custody and recording function.
• B) An increase in the number of vendors used.
• C) Increased compensation of agents through side agreements.
• D) Mathematically accurate vendor invoices.

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Definitions:

Bond Discount

The situation in which a bond is sold for less than its par (face) value, benefiting investors with higher interest rates than current market rates.

Bond Discount

The discrepancy between a bond's nominal value and its market price when the bond is issued at a price below its nominal value.

Liability Valuation

The process of determining the present value of future obligations or debts a company owes.

Bond Indenture Agreement

A legal contract outlining the terms and conditions between a bond issuer and the bondholders, including details of the bond issue and covenants.