1. You are a member of Arrow Company's internal audit staff. A review of office practices indicates...

Question:

1. You are a member of Arrow Company's internal audit staff. A review of office practices indicates that an accounting assistant routinely makes arrangements with the bank for short-term notes payable and signs the notes. Evaluate this practice. Would you recommend any changes?
2. How can management use notes receivable as a way to acquire cash?
3. Under what circumstances would management insist on having a notes receivable register and/or a notes payable register?
4. As a manager, why would you insist that dishonored notes receivable be charged back to the control account and the maker's subsidiary ledger account?
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...