Question: 1. Does the computer system automatically approve a credit sale based on preapproved credit limits maintained in a customer master file? 2. Are shipping documents

1. Does the computer system automatically approve a credit sale based on preapproved credit limits maintained in a customer master file?

2. Are shipping documents controlled and sequentially numbered? Is the sequence of the shipping documents properly accounted for to identify any missing documents?

3. Is there a mechanism for proper cancellation of shipping documents?

4. Is the accounts receivable master file reconciled to the general ledger on a monthly basis?

5. Does the accountant independently reconcile the bank account balance?\ 6. Are batch totals of cash receipts compared with a computer summary report of the cash receipts journal by the data control clerk?

7. Is there a mechanism to internally verify if cash and credit sales transactions are charged to the correct general ledger account?

8. Are cash receipts recorded on a daily basis?

Step by Step Solution

★★★★★

3.40 Rating (159 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

ANSWER These questions seem to focus on internal controls related to sales shipping accounts receivable and cash receipts Let me address each question ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

DON'T SUMMARIZE JUST PARAGRAPH OF WHAT YOU THOUGHT/LEARNED CHAPTER 13 - The phrase "garbage in, garbage out" highlights the importance of input controls. If the data entered into a system are...

In Parts I and II of this case, you performed preliminary analytical procedures and assessed acceptable audit risk and inherent risk for Pinnacle Manufacturing. Your team has been assigned the...

7) The second financial statement to prepare is the statement of retained eamings. To determine the ending balance of retained earnings you need to start with the opening balance as reported in the...

14-22 (OBJECTIVES I42, 14-3, 14-4, 14-5) Items 1 through 8 are selected questions of the type generally found in internal control questionnaires used by auditors to obt Obtain a understanding of...

QUESTION: FOR THE SALES ORDERING PROCESS: 1. Identify specific risks in the sales ordering process (at least 3). 2. Create a specific detective control for each risk you identified in question 1 AND...

Controlling Revenue An engagement team is planning the audit of Always Better Care Company (ABC or the "Company"), an SEC registrant that develops, manufactures, and sells a range of products related...

I haveattached an audit case that need to be answered the three questions at the end. Also have attached a handout with flow diagrams that have to be organized in a most effective way by removing...

Fourseas Wholesaler Limited CASE BACKGROUND Fourseas is a wholesaler of sundries goods to business customers in Hong Kong. Fourseas gains its competitive edge by offering a wide variety of quality...

Olympia Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost. At the beginning of the year, Olympia estimated total manufacturing overhead costs at...

Calculate the number of formula units in a 25.5 Kg sample of NISO4 a) 1.25x10-0 formula units b) 9.92x1025 formula units c) 1.38x1026 formula units d) 1.74x1026 formula units e) none of the answers

During the observation of the physical inventory count, the auditor should Blank _ _ _ _ _ _ . Multiple select question. obtain tag control information for testing inventory compilation ensure that...

In your own words. With a minimum of five sentences, post your response to the topic: Our textbook defines morality as the ways that we think about, feel about, and treat people who are different...

Company X operates in a wide space providing financing and advisory solutions to owners of Senior Living, Healthcare, Hospitals, and Market-Rate/Affordable Multifamily projects. In todays marketplace...

Generate a pulse train with Ton-20us and Toff-10us using 555 timer circuit.

Design a square wave generator using OPAMP to have output frequency of 2.5KHZ with variable duty cycle from 30% to 70%. Note: You have to use diodes in the feedback path.

Which of the following approaches best demonstrate an effective balance of advocacy and inquiry in finance business partnering? Select all that apply. Presenting a detailed financial analysis, then...

What is meant by an attribute in sampling for tests of controls and substantive tests of transactions? What is the source of the attributes that the auditor selects?

The following are misstatements that might be found in the client's year-end cash balance (assume that the balance sheet date is June 30): 1. The outstanding checks on the June 30 bank reconciliation...

Distinguish the auditor's responsibility for testing controls in an integrated audit of a public company from the responsibility to test controls in an audit of a nonpublic company.

3. What is culture and what is the connection and differences with climate?

1. How would you define "climate"?

2. At the end of each coaching session, first the coach says how they think they did, then the coachee describes how it was for them and the value derived, and finally the observer gives their view,...