Question

Fleming, the purchasing manager at Sparks Hardware Wholesalers, has a relative named Patterson who owns a retail hardware store. Fleming arranged for hardware to be delivered by manufacturers directly to the retail store on a C.O.D. (cash-on-delivery) basis to enable Patterson to buy at lower wholesale prices. Fleming was most likely able to do this because of Sparks' poor internal control regarding

A) Perpetual inventory records
B) Processing of cash receipts
C) Processing of purchase orders
D) Processing of invoices

Answer 1

C) Processing of purchase orders

Step-by-step explanation:

The answer is

C) Processing of purchase orders

Purchase order is commonly known as PO in commercial language. A purchase order is a first commercial paper or document which is issued by the buyer and is sent to the seller giving details about the type of products and the quantity of the product the buyer needs to purchase.

Purchase Order serves as the first legal contract between the buyer and the seller upon the required quantities and the type of the products.

The seller can only sell and deliver the items or products to the buyer only after the purchase order is received from the buyer's end and by issuing an invoice for the same.

Fleming arranged for Patterson for the hardware to be delivered directly to his retail store on a cash-on-delivery basis which enables Patterson to buy these goods at lower wholesale prices. Fleming could do this without receiving the purchase order from Patterson because of Sparks' poor internal control regarding ---

C) Processing of purchase orders