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In: Accounting

Joy Tucker

Joy Tucker started a new business: a coffee and pastry cart located at the local library. Joy hired her brother, Eric, as her assistant. Joy and Eric personally make all the purchases of items needed to stock the cart, using procurement cards issued in the name of the company. Because Joy is personally liable for payments made on the procurement cards, she recognizes the need to establish policies for her brother to follow for the use of this card. Suggest some controls that should be in place. Identify some resources that need to be purchased for this business.

 

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Expert Solution

The credit card used should have a dollar amount limit as well as a daily limit. The card can also be restricted to certain kinds of vendors. For example, hotels, air fare, electronics stores, and liquor stores could all be vendors that would be prohibited purchases on this credit card. The types of resources that would be purchased are paper products such as coffee filters, paper cups, napkins, and plates; plastic utensils; ground coffee beans; creamer, sugar, sweetener, and milk; pastries; and various cleaning supplies. Finally, Joy should review all charges on the credit card each month to detect any misuse of the card.

Raffay answered 2 years ago
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