Combining the Functions of Authorizing and Executing Events Is a Violation

question 6

True/False

Combining the functions of authorizing and executing events is a violation of the organizational control plan known as segregation of duties.

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Definitions:

Accounts Payable Period

The average number of days it takes a company to pay off its suppliers and creditors.

Operating Cycle

The time period between the acquisition of inventory by a company and the receipt of cash from the sale of that inventory.

Payables Turnover

A financial efficiency ratio that measures how quickly a company pays off its suppliers by comparing net purchases to average accounts payable.