Alpha Company Uses Its Sales Invoices for Posting Perpetual Inventory

question 26

Multiple Choice

Alpha Company uses its sales invoices for posting perpetual inventory records. Inadequate control activities over the invoicing function allow goods to be shipped that are not invoiced. The inadequate control activities could cause an

• A) Understatement of revenues, receivables, and inventory.
• B) Overstatement of revenues and receivables and an understatement of inventory.
• C) Understatement of revenues and receivables and an overstatement of inventory.
• D) Overstatement of revenues, receivables, and inventory.

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Definitions:

Actual Output

Refers to the real or achieved results or outcome of a process, which can be compared to expected or intended outputs.

Potential Output

Potential output is the maximum amount of goods and services an economy can produce when it fully uses its available resources.

Köhler Effect

A phenomenon in social psychology where less capable members of a group are motivated to increase their effort on a task to match the performance levels of more capable members.

Productive Individuals

People who are consistently able to achieve high output within the expected timeframes, contributing significantly to their teams or projects.