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Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202

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BuyFindarrow_forward

Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202
Chapter 4, Problem 1DQ
Textbook Problem
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Why do firms have separate departments for warehousing and shipping? What about warehousing and inventory control? Doesn’t this just create more paperwork?

To determine

Explain the reasons for having separate departments for warehousing and shipping. Also, explain the reasons for having separate departments for warehousing and inventory control. Explain whether or not making separate departments for each function create more paperwork.

Explanation of Solution

Segregation of Duties:

Segregation of duties is a part of internal control. In segregation of duties, a procedure is divided into smaller tasks and each task is allotted to separate individuals. Segregation technique is used so that a single officer or employee is not given an independent control over an entire process.

Inventory control function: This department manages the inventory records, which includes recording the increase and decrease of inventory. This department is also responsible for placing purchase orders on the basis of quantity required and quantity available.

Warehousing function: This department is in-charged with receiving and forwarding goods in accordance with formal orders by the authorized personnel. Warehousing staff is generally concerned with maintenance of inventory and keeping the inventory free from damage or leakage. Warehousing staff is also responsible for

Shipping function: This department is responsible for receipt and disbursement of inventory. This department is responsible for receiving inventory checking and packing the inventory and dispatching the goods to customers...

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Chapter 4 Solutions

Accounting Information Systems
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