An Accounting Policy That Requires a Purchasing Manager to Sign

question 36

Multiple Choice

An accounting policy that requires a purchasing manager to sign off on all purchases over $5,000 is an example of

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

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Definitions:

Equity Method

An accounting method for recording investments in other companies, where the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's net income or loss.

Partial Equity Method

An accounting approach used for investments in associates where the investment is recorded at cost and adjusted for the investor's share of profit or losses.

Initial Value Method

An accounting method that records investments at their original purchase cost without adjusting for changes in market value.

Net Position

Net Position represents the difference between an entity's assets and liabilities, indicating the financial health or net worth of an entity.