Question
For each control, identify the assertion for which the control is designed to prevent, or detect. and correct misstatements. a. Occurrence of sales. f. Cutoff
For each control, identify the assertion for which the control is designed to prevent, or detect. and correct misstatements.
| a. | Occurrence of sales. | f. | Cutoff of sales. | |
|---|---|---|---|---|
| b. | Rights and obligations for accounts receivable. | g. | Completeness of cash balances. | |
| c. | Classification of cash receipts. | h. | Existence of accounts receivable. | |
| d. | Completeness of sales. | i. | Completeness of cash receipts. | |
| e. | Accuracy of sales. | j. | Occurrence of cash receipts. |
Consider the following list of internal controls associated with the revenue process.
| 1. | Software compares the dates on every sales invoice with the date on the underlying bill of lading. | select the letter abcdefghij | ||
|---|---|---|---|---|
| 2. | An independent process is set up to monitor monthly statements received from a factoring agent and monitor payments made by customers to the factoring agent. | select the letter abcdefghij | ||
| 3. | Software starts with the bank remittance report, comparing each item on the bank remittance report with a corresponding entry in the cash receipts journal. | select the letter abcdefghij | ||
| 4. | Software compares quantities and prices on the sales invoice with information on the packing slip and information on the sales order. | select the letter abcdefghij | ||
| 5. | Software reviews every sales invoice to ensure that the invoice is supported by an underlying bill of lading. | select the letter abcdefghij | ||
| 6. | Software compares customer numbers in the cash receipts journal with customer numbers on the bank remittance report. | select the letter abcdefghij | ||
| 7. | Software develops a one for one match of every item in the cash receipts journal with every item in the bank remittance report. | select the letter abcdefghij | ||
| 8. | A company sends monthly statements to customers and has an independent process for following up on complaints from customers. | select the letter abcdefghij | ||
| 9. | The client performs an independent bank reconciliation. | select the letter abcdefghij | ||
| 10. | Software develops a one-for-one match, starting with shipping documents, to ensure that each shipping document results in a sales invoice. |
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