Define the Six Types of Custody Arrangements

question 8

Essay

Define the six types of custody arrangements. Which arrangement is considered superior to the others?

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Definitions:

Contra-Asset

An account displayed on the balance sheet that reduces the value of a related asset, such as accumulated depreciation.

Liability

Financial obligations, debts, or responsibilities owed by a business to others, to be settled over time through the transfer of economic benefits.

Invoice Approval Form

Used by the accounting department in checking the invoice and finally approving it for recording and payment.

Purchasing Department

A division within a business that is responsible for acquiring goods and services that are necessary for the company's operations.