Which of These Arrangements of Duties Could Most Likely Lead

question 44

Multiple Choice

Which of these arrangements of duties could most likely lead to an embezzlement or theft?

• A) The inventory warehouse manager has responsibility for making the physical inventory observation and reconciling discrepancies to the perpetual inventory records.
• B) The cashier prepared the bank deposit, endorsed the checks with a company stamp, and delivered the cash and checks to the bank for deposit (no other bookkeeping duties).
• C) The accounts receivable clerk received a list of payments received by the cashier so he could make entries in the customers' accounts receivable subsidiary accounts.
• D) The financial vice president received checks made out to suppliers and the supporting invoices, signed the checks, and mailed the checks.

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Definitions:

Postaudit

A thorough review conducted after the completion of a project or investment to evaluate its actual performance against expected outcomes.

Break-Even Time

Break-Even Time refers to the period required for a business to generate enough revenue to cover its total initial investment costs, effectively reaching a financial state where no loss or gain is realized.

Payback Period

The time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment.

Net Present Value

Net present value is a financial metric that calculates the present value of all cash flows associated with a project, including both inflows and outflows, to determine its profitability.