For Effective Internal Control, Employees Maintaining the Accounts Receivable Subsidiary

question 36

Multiple Choice

For effective internal control, employees maintaining the accounts receivable subsidiary ledger should not also approve

• A) employee overtime wages.
• B) credit granted to customers.
• C) write-offs of customer accounts.
• D) cash disbursements.

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Definitions:

Purchase Money

Funds used specifically for buying an asset, often in the context of money borrowed to purchase real estate.

Security Interest

A legal right granted by a debtor to a creditor over the debtor's property to secure the repayment of a debt.

Consumer Goods

Products that are purchased for personal or household use, rather than for manufacturing or reselling.

Priority Rule

A principle that establishes the order in which claims or legal rights are to be enforced or satisfied.