For a Firm That Practices Good Internal Controls in the Sales

question 104

Multiple Choice

For a firm that practices good internal controls in the sales and collections cycle, the function of indicating credit approval should be recorded on which of the following documents?

• A) sales order
• B) sales invoice
• C) customer order
• D) remittance advice

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Definitions:

Budgeted Net Income

The estimated net income a company expects to earn over a specific period, as outlined in its budget.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, often used to assess whether a company has sufficient cash to fulfill its operations and obligations.

Budgeted Disbursements

Planned cash outflows for a specific period, including expenses, investments, and other payments.

Desired Balance

The targeted amount of money or level of assets an individual or organization aims to maintain.