Which of the Following Situations Indicates a Potential Material Weakness

question 51

Multiple Choice

Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure?

• A)Purchase orders are not prepared for services acquired directly under authorization of department heads.
• B)The same person authorizes voucher packages and signs checks.
• C)Unacceptable goods are not scheduled on receiving reports.
• D)The same person signs checks and stamps vouchers PAID.

---

Definitions:

Discount Period

A set time period during which a discount is available, or the period between the issuance of a bill and its payment due date where a discount may be taken for early payment.

Credit Memo

A document issued by a seller to a buyer, reducing the amount the buyer owes to the seller under the terms of an existing invoice.

Sold Merchandise

Refers to the goods or products that a company has sold to its customers as part of its ordinary business operations.

Sales Tax

A tax levied on sales of goods and services, typically calculated as a percentage of the sale price.