The customer billing function of the Robinson Company, a small paint manufacturer, is attended to by a receptionist, an accounts receivable clerk and a cashier who also serves as a secretary. The company's paint products are sold to whulesalers and retail stores.

The following describes all of the procedures performed by the employees of the Robinson Company pertaining to customer billings.

1. The mail is optned by the receptionist, who gives the customers' purchase orders to the accounts receivable clerk. Fifteen to twenty orders are received each day. Under instructions to expedite the shipment of orders, the accounts receivable clerk at once prepares a five-copy sales invoice form which is distributed as follows:

a. Copy 1 is the customer billing copy and is held by the accounts receivable clerk until notice of shipment is received.

b. Copy 2 is the accounts receivable department copy and is held for ultimate posting of the accounts receivable records.

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c. Copies 3 and 4 are sent to the shipping department.

d. Copy 5 is sent to the storeroom as authority for release of the goods to the shipping department.

2. After the paint ordered has been moved from the storeroom to the shipping department, the shipping department prepares the bills of lading and labels the cartons, Sales invoice copy 4 is inserted in a carton as a packing slip. After the trucker has picked up the shipment the customer's copy of the bill of lading and copy 3 , on which are noted any undershipments, are returned to the accounts receivable clerk. The company does not "back order" in the event of undershipments; customers are expected to reorder the merchandise. The Robinson Company's copy of the bill of lading is filed by the shipping department.

3. When copy 3 and the customer's copy of the bill of lading are received by the accounts receivable clerk, copies 1 and 2 are completed by numbering them and inserting quantities shipped, unit prices, extensions, discounts, and totals. The accounts receivable clerk then mails copy 1 and the copy of the bill of lading to the customer. Copies 2 and 3 are stapled together.

4. The individual accounts receivable ledger cards are posted by the accounts receivable clerk by a bookkeeping machine procedure whereby the sales register is prepared as a carbon copy of the postings. Postings are made from copy 2 which is then filed, along with staple-attached copy 3, in numerical order. Monthly the general ledger clerk summarizes the sales register for posting to the general ledger accounts.

Required:

a. Identify (1) errors and irregularities and (2) necessary control procedures. Organize your answer around the primary functions for sales transactions.

b. Which weaknesses, if any, do you consider material? Discuss.