Budd,the purchasing agent for Lake Hardware Wholesalers,has a relative who owns a retail hardware store.Budd arranged for hardware to be delivered by manufacturers to the retail store on a C.O.D. basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over
A) purchase requisitions.
B) cash receipts.
C) perpetual inventory records.
D) purchase orders.

Question

Quizplus · Accepted Answer

Budd was likely able to arrange for the hardware to be delivered directly to his relative's store due to poor internal control over purchase orders, which would allow him to manipulate or create orders without proper oversight or authorization.

Budd,the Purchasing Agent for Lake Hardware Wholesalers,has a Relative Who