Edit View Go Window Help Upload Oncampus CO5118 Final Exam SP22 2021.pdf (page 4 of 6) ~ Q Search (b) Discuss the main considerations that will determine whether she is liable in this situation. [5 Marks] [Total for question - 10 marks] Question 4 Anonymous Company Lid has the following system for billing and recording accounts receivable: 1) An incoming customer's purchase order is received in the order department by a clerk who prepares a pre-numbered company sales order form on which is inserted pertinent information, such as the customer's name and address, customer's account number, items and quantity Page 4 of 6 24 A 44 S 5 8 9 W R T P A S D F G H K Z X C B N MEdit View Go Window Help Upload Oncampus CO5118 Final Exam SP22 2021.pdf (page 5 of 6) - Q Search carbon copy by-products of the invoicing procedure. 5) The shipping department copy of the invoice and the bills of lading are then sent to the shipping department. After the order has been shipped, copies of the bill of lading are returned to the billing department. The shipping department copy of the invoice is filed in the shipping department. 6) In the billing department, one copy of the bill of lading is attached to the customer's copy of the invoice and both are mailed to the customer. The other copy of the bill of lading, together with the sales order form, is stapled to the invoice file copy and filed in invoice numerical order. 7) The data file is updated for shipments that are different from those billed earlier. After these changes are made, the file is used to prepare a sales journal in sales invoice order and to update the accounts receivable master file. Daily totals are printed to match the control totals prepared earlier. These totals are compared with the hash and control totals by an independent person. REQUIRED (a) Identify six important controls. For each control identified, specify the related sales transaction-related audit objective. [6 marks] 24 Bea 44 NO 4 5 6 8 9 O Q W R T U O P 4 S F G H K X C B N M commandEdit View Go Window Help Upload Oncampus CO5118 Final Exam SP22 2021.pdf (page 5 of 6) Q Search ordered. After the sales order form has been prepared, the customer's purchase order is stapled to it. 2) The sales order form is then passed to the credit department for credit approval. Rough approximations of the billing values of the orders are made in the credit department for those accounts on which credit limitations are imposed. After investigations, approval of credit is noted on the form. 3) Next the sales order form is passed to the billing department where a clerk key enters the sales order information, including unit sales prices obtained from an approved price list, into a data file. The data file is used to prepare sales invoices. The billing application automatically accumulates daily totals of customer account numbers and invoice amounts to provide hash totals and control amounts. These totals, which are inserted in a daily record book, serve as predetermined batch totals for verification of computer inputs. 4) The billing is done on pre-numbered, continuous, carbon-interleaved forms having designations such as customer's copy, sales department copy, file copy and shipping department copy. Bills of lading are also prepared as carbon copy by-products of the invoicing procedure. 5) The shipping department copy of the invoice and the bills of lading are then sent to the shipping department. After the order has been shipped, copies of the bill of lading are returned to the billing department. The shipping department copy of the invoice is filed in the shipping department 24 % 4 B Q W E R U O P 4 S D G H K Z X C B N M command