Internal Control Over Accounts Payable Is Improved When

question 50

Multiple Choice

Internal control over accounts payable is improved when:

• A) Purchase orders show approved prices.
• B) Informal bids are obtained.
• C) Annual trial balance of accounts payable subsidiary ledgers is required.
• D) Payment is made upon approval of the purchasing agent.

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Definitions:

Current Assets

Current Assets are all assets of a company that are expected to be sold, consumed, or converted into cash within one year or within the operating cycle of a business.

Long-Term Liabilities

Obligations expected to be paid more than one year in the future.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends.

Base Year

A specific year or period selected as a reference point for comparison with subsequent years or periods in financial and economic analyses.