The Need for Additional Control Procedures When Using Computer-Generated Purchase

question 85

Multiple Choice

The need for additional control procedures when using computer-generated purchase orders would be met by

• A)establishment of a maximum quantity limits that can be ordered within a given time period.
• B)automated acceptance for high dollar levels.
• C)purchase order copies sent by purchasing to receiving.
• D)accounts payable department entering new vendors into the system.

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Definitions:

Easier Credit

Conditions under which banks make more loans available to customers with lower interest rates and less stringent qualification criteria.

Net Period

The timeframe between the issuance of an invoice and the due date for payment, often referred to in terms of net 30, net 60, etc.

Prompt Payment Discount

A discount offered to customers for paying their invoices early, serving as an incentive for quicker payment.

Credit Bureaus

Organizations that collect and maintain individual credit information, supplying it to creditors to help them decide whether to lend money.