An Accounting Policy That Requires a Purchasing Manager to Sign

question 27

Multiple Choice

An accounting policy that requires a purchasing manager to sign off on all purchases over $10,000 is an example of

• A)general authorization.
• B)specific authorization.
• C)special authorization.
• D)generic authorization.

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Definitions:

DuPont Formula

A financial analysis method that breaks down Return on Equity into three parts: operating efficiency, asset use efficiency, and financial leverage.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as the return from an investment divided by the cost of the investment.

Negotiated Price

The final price at which a transaction is made between buyer and seller after discussion and agreement.

Investment Center Performance

Involves the evaluation of a business unit's effectiveness in generating profits and efficiently managing its capital investments.