A Receiving Department Compares Inventory Items Received with Copies of Purchase

question 30

Multiple Choice

A receiving department compares inventory items received with copies of purchase orders.The purchase orders list the name of the vendor and do not list the quantities of the material ordered.Using the purchase orders,the receiving department is most likely to detect:

• A)Deliveries for which no purchase order was issued.
• B)Unapproved sales orders.
• C)Partial deliveries.
• D)Deliveries of a greater quantity of items than those ordered.

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Definitions:

Accounting Equation

A fundamental financial principle representing the relationship between an entity’s assets, liabilities, and equity; expressed as Assets = Liabilities + Equity.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the owners' share of the company.

Statement

A written record detailing the financial performance or position of a company at a specific point in time.

Multiple-Step Income Statement

An income statement that separates operating revenues and expenses from non-operating ones, highlighting various components of net income.