Question

An accounting policy that requires a purchasing manager to sign off on all purchases over 10,000 is an example of

a. general authorization.
b. specific authorization.
c. special authorization.
d. generic authorization.

Answer 1

The correct answer is option b. specific authorization.

Step-by-step explanation:

The accounting policy described in the question is an example of specific authorization. This type of authorization is a control mechanism used in business to prevent fraud and errors by requiring a designated official, in this case, the purchasing manager, to approve transactions exceeding a certain threshold.

The requirement that all purchases over $10,000 must be signed off by the purchasing manager is a method to ensure that large transactions receive individual attention and approval, thereby maintaining accountability and oversight over significant financial decisions.