Which of the Following Is the Most Effective Control Procedure

question 2

Multiple Choice

Which of the following is the most effective control procedure to detect vouchers that were prepared for the payment of goods that were not received?

• A) Count goods upon receipt in storeroom.
• B) Match purchase order, receiving report, and vendor's invoice for each voucher in accounts payable department.
• C) Compare goods received with goods requisitioned in receiving department.
• D) Verify vouchers for accuracy and approval in internal audit department.

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Definitions:

Average Total Cost

Average total cost is the total cost of production divided by the number of units produced, indicating the cost per unit.

Price War

Successive, competitive, and continued decreases in the prices charged by firms in an oligopolistic industry. At each stage of the price war, one firm lowers its price below its rivals’ price, hoping to increase its sales and revenues at its rivals’ expense. The war ends when the price decreases cease.

Limit Pricing

A strategy used by dominant firms to set prices low enough to discourage entry into the market by potential competitors.

Informal Pricing

The establishment of prices based on flexible, non-regulatory factors such as negotiation, haggling, or customary practices, rather than fixed price tags.