True False

Billing to the customer should take place prior to shipment so that the customer receives the bill before the merchandise arrives.

Proper sales authorization control requires obtaining approval before processing an order and again before the order is shipped.

The internal control activity, related to the authorization of transactions, requires that only specific individuals within the company should have the authoritative responsibility for establishing sales prices and credit terms.

In order to meet the objectives of internal controls, individuals with authoritative responsibilities need to have access to the record keeping functions.

A benefit of a company accounting for their documents in a numerical sequence is that it is much easier to see if a document or documents are missing.

A reconciliation should be prepared by the same person who is responsible for the recording function.

Internal controls over sales returns are similar to those for the revenue process where it is important to match receiving reports for returns with the related credit memos to ensure that the company issues credit for all returns for the correct amounts.

Specific internal control procedures to be performed, specifically independent checks and reconciliations, should be performed by someone who as the responsibility for the recording of the transactions and the custody of the assets received.

The remittance advice sent by the customer with the related payment is used by the vendor to properly apply the payment to the customer's account.

The segregation of duties states that the authorization of duties is to be separated from the recording function but not from the custody function.

Detailed customer accounts should be maintained and reconciled with customer statements regularly.

Controls over cash collections are likely the most important control procedure because cash is the asset most susceptible to theft and misappropriation.