Listed Below Are Four Examples of Possible Exposures Found in the Various

question 82

Essay

Listed below are four examples of possible exposures found in the various business cycles of a certain business.
Required: For each example,identify the transaction cycle control objective and give a solution which will help to reduce the possible exposure found in each example.
a.There is no written policy regarding access to the securities the company purchases as an investment.The securities are in a file in the bottom drawer of a file cabinet in the office.
b.The office supervisor makes "spur of the moment" decisions regarding the hiring and use of vendors for office supplies and maintenance of the office and warehouse building.
c.A sales representative sent out a shipment of merchandise to a customer on Friday afternoon,telling the warehouse supervisor that he would write up the paperwork the following Monday morning.
d.The clerk who prepares and sends statements to customers was hurt in an auto accident and is on sick leave.As a result,the sales representative now prepares and sends out customer statements when he has some free time.

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Definitions:

Price of Labor

The wage rate or compensation paid to employees for their work or services.

Units of Output

The quantity or number of items produced or services rendered in a given time period.

Production Technique

Methods and processes used in the creation of goods and services, often involving specific equipment or approaches to maximize efficiency.

Price of Capital

The cost of using capital, which can include the interest rate on loans or the rate of return required by investors on their investment in a company.