Which of the Following Is an Effective Control That Encourages

question 12

Multiple Choice

Which of the following is an effective control that encourages receiving department personnel to count and inspect all merchandise received?

• A)Quantities ordered are excluded from the receiving department copy of the purchase order.
• B)Vouchers are prepared by accounts payable department personnel only after they match item counts on the receiving report with the purchase order.
• C)Receiving department personnel are expected to match and reconcile the receiving report with the purchase order.
• D)Internal auditors periodically examine,on a surprise basis,the receiving department copies of receiving reports.

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Definitions:

Bank Reconciliation

The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.

Non-current Liability

A Non-current Liability is a financial obligation that a company does not expect to settle within the next twelve months from the reporting date.

Credit Balance

A situation where the total credits in an account exceed the total debits; it's common in liability, revenue, and equity accounts.

Risk Assessment

The process of identifying and evaluating potential risks that could negatively affect the achievement of objectives.