The Purpose of Segregating the Duties of Distributing Payroll Checks

question 33

Multiple Choice

The purpose of segregating the duties of distributing payroll checks and hiring personnel is to:

• A)Separate the custody of assets from the accounting for those assets.
• B)Establish clear lines of authority and responsibility.
• C)Separate duties within the accounting function.
• D)Separate the authorization of transactions from the custody of related assets.

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Definitions:

Accounts Receivable Period

The typical duration in days that a company requires to receive payment following a sale.

Sales

The activities involved in selling goods or services directly to consumers or end-users.

Inventory Purchases

The act of buying goods and materials a company intends to sell or use in production, impacting its stock levels and financial state.