Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cash Receipt Systems Customers send checks and remittance advices by mail. Mail volume is typically high requiring a mail room staff of 35 clerks and

Cash Receipt Systems

Customers send checks and remittance advices by mail. Mail volume is typically high requiring a mail room staff of 35 clerks and one supervisor. The clerks share equally in the task of sorting the mail and directing it to the appropriate recipient. In the case of cash receipts the clerks open the envelopes to verify that the checks are signed and are constant in amount with the remittance advice. The checks and remittance advices are collected into batches and sent to the AR department, where the AR clerk reviews them for correctness, posts to the AR-Sub ledger. The clerk (the mail room clerk) then prepares two copies of a remittance list. One of these is filed in the department along with the remittance advice and the other is sent to the cash receipts department with the checks. Finally the clerk (the AR department clerk) summarizes the batch of cash receipts transaction and post to the general ledger AR-Control account and the Cash account. Upon receipt of the checks and remittance list, the Cash Receipts clerk reconciles the documents and post the checks to the Cash Receipts journal. At the end of the day, the clerk (the cash receipt department clerk) prepares a deposit slip and sends it along with the checks to the bank.

Required:

Part I: After evaluating the cash receipts system described above, please assess risks in the current system configuration if there is any. In your assessment, please name and describe each risk identified and specify threats each of them poses.

Part II: After identified risks, please recommend control activities to reduce or eliminate threats from each risk. When you describe your control activities, please name and elaborate how they mitigate for each risk.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Financial Accounting

Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King

3rd Edition

0070054142, 978-0070054141

More Books

Students also viewed these Accounting questions

Question

Evaluate the following limits. Cos o lim

Answered: 1 week ago

Question

13. Let X be exponential with mean 1/; that is, fX (x) = ex , 0 1].

Answered: 1 week ago

Question

Describe the factors influencing of performance appraisal.

Answered: 1 week ago

Question

What is quality of work life ?

Answered: 1 week ago

Question

When and how will strategy reviews take place?

Answered: 1 week ago

Question

Do you know how you will monitor progress?

Answered: 1 week ago