Authorizing a credit sale is an example ofSelect one:a.preventive controlb.corrective controlc.accounting controld.detective control
Question
Authorizing a credit sale is an example of
Select one:
- a. preventive control
- b. corrective control
- c. accounting control
- d. detective control
Solution
Break Down the Problem
- Identify the key terms: credit sale, control types.
- Understand the context of each control type: preventive, corrective, accounting, and detective.
Relevant Concepts
- Preventive Control: These are designed to prevent errors or fraud before they occur.
- Corrective Control: These control measures are taken to correct errors or omissions after they have occurred.
- Accounting Control: These methods and processes ensure that financial transactions are recorded accurately and comply with regulations.
- Detective Control: These measures attempt to identify errors or irregularities after they have occurred.
Analysis and Detail
- In the context of authorizing a credit sale, we’re looking to prevent unauthorized credit transactions.
- Authorizing a sale ensures that only approved transactions are processed, which helps prevent potential fraud or credit risk.
- Therefore, it serves as a preventive measure to avoid potential issues before they materialize.
Verify and Summarize
Given the definitions and analysis, authorizing a credit sale clearly falls under the category of preventive control.
Final Answer
a. preventive control
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