Question
In the table below, column 1 lists the control procedures. In column 2, identify if this control procedure is a strength or deficiency. (5 Marks)
In the table below, column 1 lists the control procedures. In column 2, identify if this control procedure is a strength or deficiency. (5 Marks)
Item | Strength/Deficiency |
Credit is granted by a credit department. | 1 |
Once shipment occurs and is recorded in the sales journal, all shipping documents are marked recorded by the accounting staff. | 2 |
Sales returns are presented to a sales department clerk who prepares a written, prenumbered receiving report. | 3 |
Cash receipts received in the mail are received by a secretary with no recordkeeping responsibility. | 4 |
Cash receipts received in the mail are forwarded unopened with remittance advices to accounting. | 5 |
The cash receipts journal is prepared by the treasurers department . | 6 |
Cash is deposited weekly.
| 7 |
Statements are sent monthly to customers.
| 8 |
Write-offs of accounts receivable are approved by the controller.
| 9 |
The bank reconciliation is prepared by individuals independent of cash receipts recordkeeping. | 10 |
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