Alpha Company Uses Its Sales Invoices for Posting Perpetual Inventory

question 56

Multiple Choice

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

Goal-Based Cultures

Organizational cultures that prioritize achievement of specific objectives, focusing on results and performance.

Cultural Conflict

Disagreements or misunderstandings arising from differences in cultural backgrounds, values, or practices among individuals or groups within a project.

Risk Taking

The action of engaging in behaviors that involve some level of risk, often with the potential for significant reward.

External Attribute

An external attribute is a characteristic or feature of an object or system that can be observed or measured without changing its internal state.