A summary of the controls for the revenue and cash receipts cycle of Keystone Computers & Networks, Inc., appears on pages 479–492.

a. For the following three controls over sales, indicate one type of error or fraud that the control serves to prevent or detect. Organize your solution as follows:

Control ………………………………………………………………. Error or Fraud Controlled

1. Application controls are applied when customer

 orders are entered by the sales order clerk.

2. The computer assigns numbers to sales invoices 

  when they are prepared.

3. Monthly statements are mailed to customers.

b. For the following three controls over cash receipts, indicate one type of error or fraud that the control serves to prevent or detect. Organize your solution as follows:

Control ……………………………………………………………….. Error or Fraud Controlled

1. Cash receipts are prelisted by the receptionist.

2. The accounting manager reconciles control

totals generated by the accounts receivable

computer program.

3. The computer summaries of cash collections

and cash sales are reconciled to prelistings

of cash receipts and cash deposits by the

accounting manager.