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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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