Question
A critical control in the revenue cycle is the credit approval of a sales order before it is processed and filled. a. For proper segregation
A critical control in the revenue cycle is the credit approval of a sales order before it is processed and filled.
a. For proper segregation of duties, which department should perform this function?
b. Describe the information needed by the appropriate department to perform this function.
c. Describe the primary operational objective of the credit approval process.
d. On June 9, 2017, U. U. B. Mason Company received three sales orders from customers. The sales orders were sent to the appropriate department for credit approval. U. U. B. Mason Companys credit policy states: All customer invoices are due within 30 days. Customer invoices are considered significantly past due when they are outstanding for more than 60 days. Customers will be denied credit on new orders if: 1. The new order will cause the customers account balance to exceed the customers credit limit, or 2. The customers account is classified as significantly past due. Information relevant to the orders receive on June 9, 2017 reveals:
Customer Order Amount Credit Limit Account Balance 0 30 days 30 60 days Over 60 days
R.W. Higgins & Co. $5,200 $25,000 $9,500 $6,000 $2,000 $1,500
Acme Products $12,700 $30,000 $22,000 $22,000 $-0-
Felicia Buyers Club $7,800 $20,000 $5,900 $5,400 $500 $-0-
Apply U. U. B. Mason Companys credit policy to approve or deny credit on each customer order. Provide a brief explanation to support your decision.
Customer Approve or Deny
R.W. Higgins & Co. ??????
Brief Explanation:
Customer Approve or Deny
Acme Products ??????
Brief Explanation:
Customer Approve or Deny
Felicia Buyers Club ?????
Brief Explanation:
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