Multiple Choice Questions:

1. The arrangements between buyer and seller as to when payments for merchandise are to be made are called

a. credit terms

b. net cash

c. cash on demand

d. gross cash

2. The most important element of the fraud triangle is

a. financial pressure

b. opportunity

c. rationalization

d. incompatible duties

3. Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

a. inadequate internal control

b. duplication of effort.

c. external verification.

d. segregation of duties.

4. Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

a. increases the potential for errors and fraud.

b. decreases the potential for errors and fraud.

c. is an example of good internal control.

d. is a good example of safeguarding the company's assets.