A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency working capital fund of P40,000. Whenever the sales agency needs more working capital it transmits the receipts for what it has spent back to the main office which then sends cash back to the agency to cover the remitted items. Small amounts of merchandise inventory are sent to the agency for display and demonstration purposes. These items are transferred at cost. An operation such as the one descried above most closely resembles a(n): Petty Cashsystem Accounts receivable subsidiaryledger Accounts payable subsidiaryledger Vouchersystem
A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency working capital fund of P40,000. Whenever the sales agency needs more working capital it transmits the receipts for what it has spent back to the main office which then sends cash back to the agency to cover the remitted items. Small amounts of merchandise inventory are sent to the agency for display and demonstration purposes. These items are transferred at cost. An operation such as the one descried above most closely resembles a(n): Petty Cashsystem Accounts receivable subsidiaryledger Accounts payable subsidiaryledger Vouchersystem
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 35P: Hepworth Credit Corporation is a wholly owned subsidiary of a large manufacturer of computers....
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A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency
- Petty Cashsystem
Accounts receivable subsidiaryledger- Accounts payable subsidiaryledger
- Vouchersystem
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