Budd, the Purchasing Agent for Lake Hardware Wholesalers, Has a Relative

question 25

Multiple Choice

Budd, the purchasing agent for Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a C.O.D. basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over:

• A)purchase requisitions.
• B)cash receipts.
• C)perpetual inventory records.
• D)purchase orders.

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Definitions:

Iroquois

A historically powerful northeast Native American confederacy known for forming the Iroquois League, which brought together several tribes for strength and diplomacy.

Algonquin

Refers to a group of Native American peoples speaking Algonquian languages and originally living in the North Eastern region of North America.

Mercantilism

An economic theory and practice prevalent in Europe during the 16th to 18th centuries, centered on building a nation's wealth by maximizing exports and minimizing imports.

Articles of Capitulation

Documents that outline the terms and conditions under which a military force surrenders, typically agreed upon by conflicting parties during a conflict.