Final answer:
In an ordinary sales transaction of a wholesaling business, the point at which a lack of specific authorization would be of least concern to the auditor is 4) Selling of goods for cash.
Step-by-step explanation:
The granting of credit, shipment of goods, and determination of discounts all involve certain risks such as credit risk, shipment errors, and incorrect pricing that require authorization to ensure the accuracy and validity of the transactions. In contrast, a cash sale is straightforward with immediate payment, leaving less room for error or misuse when the transaction is taking place, thus requiring less stringent authorization.
A seller can reassure a possible buyer who is faced with imperfect information by providing clear and comprehensive product descriptions, establishing a return policy, offering warranties or guarantees, showcasing customer reviews and testimonials, and ensuring transparency regarding the product's origin and manufacturing processes. These measures can build trust and help alleviate the buyer's concerns due to imperfect information.
When considering the degree of imperfect information in different purchases:
- Buying apples at a roadside stand is typically a situation with relatively low imperfect information.
- Buying dinner at a neighborhood restaurant is also low in imperfect information.
- Buying a used laptop at a garage sale often has relatively high imperfect information.
- Ordering flowers over the internet for a friend in a different city can carry a relatively high degree of imperfect information.