Which of the Following Most Likely Would Be the Result

question 15

Multiple Choice

Which of the following most likely would be the result of ineffective internal control policies and procedures in the revenue process?

• A)Final authorization of credit memos by personnel in the Sales Department could permit an employee defalcation scheme.
• B)Fictitious transactions could be recorded, causing an understatement of revenues and an overstatement of receivables.
• C)Irregularities in recording transactions in the subsidiary accounts could result in a delay in goods shipped.
• D)Omission of shipping documents could go undetected, causing an understatement of inventory.

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Definitions:

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

Inventions

Novel and unique creations or discoveries that are the result of human creativity and ingenuity.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, reflecting wear and tear, obsolescence, or age.

Annual Depreciation

The portion of the total cost of a tangible asset that is expensed each year over its useful life.