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:

Common Stock Subscribed

An agreement by investors to purchase common stock from a company, indicating the investors' commitment to buy shares at a future date.

Subscriptions Receivable

Amounts owed by customers for subscription services that have been billed but not yet paid.

Stock Warrants

Certificates granting the holder the right to purchase shares of stock at a specified price before a set expiration date.

Option Price

The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.