Which of the Following Is not a Control That Should

question 7

Multiple Choice

Which of the following is not a control that should be established for purchases of equipment?

• A)Establishing a budget for capital acquisitions.
• B)Requiring that the department that ordered the equipment is the same that requested the equipment.
• C)Requiring that the receiving department receive the equipment.
• D)Establishing an accounting policy regarding the minimum dollar amount of purchase that will be considered for capitalization.

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Definitions:

Short-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a short period, when some production variables are fixed.

Marginal Cost Curve

A visual chart that illustrates the change in the expense associated with producing an extra unit of a product as the total output grows.

Average Variable Cost

The total variable costs divided by the quantity of output produced, reflecting the average cost of producing each unit excluding fixed costs.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the surplus gained from an activity beyond the next best alternative.