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True/False. For good controls over cash​ payments, the person who orders goods from a supplier should...

True/False.

For good controls over cash​ payments, the person who orders goods from a supplier should always be different from the person who approves the payment.

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Answer #1

The answer is definitely TRUE.

It is a question of how to efficiently put in place the internal control for payments.

Now, if the person who orders goods from a supplier is same who approves the payment then there are chances that he may not do proper negotiation or may make payments before the delivery of the goods or in that matter any kind of favor to the supplier. While, if there is a separate person for order and for payment approval, then the person making approval will check all the terms of the order and if the goods received are as per the order details / condition then only payment will be permitted. So, it will provide a double check for the company and will allow good control over cash payments.

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