Question 7

Raw materials are always purchased from the same vendor. This is an internal control weakness because:

		Quality is substandard from that one vendor.
		That one vendor is slow in shipping the goods.
		The purchasing department should be required to obtain competitive bids on all purchases over a specified amount; which helps control costs.
		There is the potential to violate the Foreign Corrupts Practices Act.

Question 8

In a company that carries a significant amount of inventory, there is no receiving department or receiving report, however, this is not an internal control weakness as there are people who work in the stockroom and manage the inventory.

True

False

Question 9

For a company with lots of merchandise inventory, A receiving department should be established. Personnel in this department should count or weigh all goods received and prepare prenumbered receiving reports. These reports should be signed, dated, and controlled. Copies should be sent to the accounting department, purchasing department, and storeroom.

true

false