Hall's Office Supplies Is a Small Store in a Rural

question 37

Multiple Choice

Hall's Office Supplies is a small store in a rural area of the United States; Ian Hall is the owner. The store also employs three purchasing agents and an accountant. While the purchasing agents handle day-to-day inventory purchases, Ian makes all large purchases (equipment, furniture and computers, for example) himself. Each purchasing agent is responsible for purchasing a specific group of inventory items; for example, one purchasing agent handles all purchases of computer-related supplies (mouse pads, compact discs) . Each purchasing agent uses his/her best judgment when deciding how much and how often to order inventory items. When inventory and other items arrive at the store, the relevant purchasing agent checks it in and puts it in the stockroom. Vendors send invoices directly to the accountant, who pays them within thirty days and reconciles the bank statement at least monthly. Ian works as a salesperson Monday through Friday from 8 a.m. to 5 p.m.;
he is assisted by two half-time sales staff. One staff person works from 8 a.m. to 12 noon, while the other works from 1 p.m. to 5 p.m. The part-time staff is in charge of keeping the shelves stocked. Hall's Office Supplies maintains a manual accounting information system, and retains copies of all documents for one year.
-Internal controls in the acquisition/payment process would be strengthened if:

• A) Ian allowed the purchasing agents to handle non-inventory purchases.
• B) Ian received large purchases himself.
• C) The accountant took over some responsibilities as a purchasing agent.
• D) Ian opened a new location in a nearby city.

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Definitions:

Saccule

A small, fluid-filled cavity or sac within the vestibular system of the inner ear, playing a key role in balance and orientation.

Vestibule

An entrance hall or other open area in a building used by the public, especially a hotel or theater.

Acoustic

Pertaining to sound or the sense of hearing.

Decibel

A unit of measurement used to express the intensity of sound or the power level of an electrical signal by comparing it with a given level on a logarithmic scale.