6. If you place a control that monthly statements be mailed with independent follow-up on customer...
6. If you place a control that monthly statements be mailed with independent follow-up on customer complaints, which of the following risks will you be addressing?
- A : Sales invoices may be billed to the wrong customer.
- B : Invoices may not be journalized or posted to customer accounts.
- C : Customers may be billed incorrect amounts.
- D : Sales invoices may be recorded in the incorrect accounting period.
Homework Answers
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6. If you place a control that monthly statements be mailed with
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11-32 (Objective 11-3) The
following is the description of sales and cash receipts for the
Lady’s Fashion Fair, a retail store dealing in expensive women’s
clothing. Sales are mainly on account using the store’s own billing
rather than credit cards; however, some customers prefer to pay
cash.
Salesclerks assist customers and then direct them to the central
desk for payment. The computer used to enter sales is operated by
the store supervisor, who has been employed for 10 years by...
AP114 (LO 8) not discovered by an inexperienced staff auditor in the audit of the Parson Company. Moderate Substantive tests of accounts receivable The following situations were 1. Several accounts were incorrectly aged in the client's aging schedule. 2. The accounts receivable turnover ratio was far below expected results. 3. Goods billed were not shipped. 4. Some year-end sales were recorded in the wrong accounting period. ral sales were posted for the correct amount but to the wrong customers in...
06-10 You are the audit supervisor of Hasel Co, which is a manufacturing company. You are currently planning the audit of trade receivables for the year ended 31 December 2008. At 31 December, Hasel's trade receivables balance was $6.500.000. Hasel Co has more than 600 customers, including nine customers owing more than $250.000 each. Tests of control revealed weaknesses in Hasel's internal control over sales and trade receivables. In prior year audits, confirmations revealed misstatements in several customers' account balances....
11-32 (Objective 11-3) The
following is the description of sales and cash receipts for the
Lady’s Fashion Fair, a retail store dealing in expensive women’s
clothing. Sales are mainly on account using the store’s own billing
rather than credit cards; however, some customers prefer to pay
cash.
Salesclerks assist customers and then direct them to the central
desk for payment. The computer used to enter sales is operated by
the store supervisor, who has been employed for 10 years by...
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