An Important Consideration in Minimizing the Risk of Fraud and Abuse

question 65

True/False

An important consideration in minimizing the risk of fraud and abuse is defining limits on the dollar value of business transactions that certain employees can process.

---

Definitions:

Merchandise

Goods that are bought and sold in the course of business, typically in a retail or wholesale setting.

Perpetual Inventory System

This method of accounting instantly documents inventory sales or purchases through computerized point-of-sale systems along with enterprise asset management software.

Gross Method

An accounting practice for recording inventory purchases without deducing available purchase discounts, presenting the gross cost in financial statements.

Cash Payment

Cash payment refers to transactions where the payment for goods or services is made immediately using physical currency or through electronic means that represent immediate funds transfer.