The Most Effective Internal Control Procedure to Prevent or Detect

question 55

Multiple Choice

The most effective internal control procedure to prevent or detect the creation of fictitious credit memoranda for sales returns is to

• A)supervise the accounts receivable department
• B)limit access to credit memoranda
• C)prenumber and sequence check all credit memoranda
• D)require management approval for all credit memoranda

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Definitions:

Holding Cost

The expense associated with maintaining inventory, including storage, insurance, depreciation, and opportunity costs, among others.

Shipping Cost

The charges incurred for transporting goods through different modes of transportation such as air, sea, or land.

Composite Score

An aggregated measurement derived from the combination of several individual scores or indicators, often used in assessments or evaluations.

Waste Management

The collection, transport, processing, recycling or disposal, and monitoring of waste materials to minimize its effect on health, the environment, or aesthetics.