Question

2. State two specific functions or jobs that should be segregated in the sales processing system. 3. State two specific functions or jobs that should be segregated in the cash receipts system. 4. For the revenue cycle, state two specific independent verifications that should be performed. What task can the accounts receivable department engage in to verify that all checks sent by the customers have been appropriately deposited and recorded? 6. What specific internal control procedure would prevent the sale of goods on account to a fictitious customer? 7. The clerk who opens the mail routinely steals remittances. Describe a specific internal control procedure that would prevent or detect this fraud. 8. A customer payment of $247 was correctly posted in the general ledger but was recorded as $274 in the customer's account receivable. Describe a specific internal control procedure that would detect this error. 9. A clerk embezzles customer payments on account and covers up the theft by making an adjustment to the accounts receivable ledger. Describe a specific internal control procedure that would prevent this fraud. 10. A credit sale is made to a customer, even though the customer's account is four months overdue. Describe a specific internal control procedure that would prevent this from happening. 11. What specific internal control procedure would prevent a customer from being billed for all 50 items ordered although only 40 items were shipped?

Answer 1

2 Sales Order processing and credit approval

3 Handling cash receipts and recording cash receipts given to different employees.

4 1 - Shipping department reconcilies goods sent from warehouse.

2 - Billing division will reconcile sales order with shipping slip

5 1- Reconcile bank statement frequently

2 - Make sure same day deposits