A Company's Internal Control Procedures Over the Acquisition Cycle Should

question 47

Multiple Choice

A company's internal control procedures over the acquisition cycle should prevent the preparation of a voucher for goods that have not yet been received. Which of the following is the best procedure to assure vouchers are not prepared for goods not received?

• A) purchase order and vendor invoice are matched to the receiving report
• B) compare goods received with goods ordered
• C) perform sample test counts of items when received
• D) compare the requisition for goods with the purchase order

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Definitions:

NPV

Net Present Value, a method used in capital budgeting to analyze the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows zero.

Required Return

The minimum return an investor expects to achieve on an investment, considering the investment's risk level.

NPV

or Net Present Value, is a financial metric used to evaluate the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.