In a properly designed internal accounting control system, the same employees should not be permitted to

a. Sign checks and cancel supporting documents.

b. Prepare disbursement vouchers and sign checks.

c. Receive merchandise and prepare receiving report.

d. Initiate a request to order merchandise and approve merchandise received.

The mailing of disbursement checks and remittance advices should be controlled by the employee who

a. Signed the checks last

b. Approved the vouchers for payment

c. Matched the receiving reports, purchase orders, and vendor invoices

d. Verified the mathematical accuracy of the vouchers and remittance advices

Which of the following controls most likely would be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad debt write-offs?

a. Employees responsible for authorizing sales and bad debt write-offs denied access to cash.

b. Employees involved in the credit-granting function are separated from the sales function.

c. Shipping documents and sales invoices are matched by an employee who does not have authority to write off bad debts.

d. Subsidiary accounts receivable records are reconciled to the control account by an employee independent of the authorization of credit.

Which of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?

a. The cashier makes the daily deposit at a local bank.

b. The cashier prepares the daily deposit.

c. The cashier endorses the checks. d. The cashier posts the receipts to the accounts receivable subsidiary ledger.

Defective merchandise returned by customers should be presented to

a. Inventory control personnel.

b. Sales personnel.

c. Purchasing personnel

d. Receiving personnel

Which of the following is not a universal rule for achieving control over cash?

a. Separate the cash-handling and record-keeping functions.

b. Deposit each day's cash receipts by the end of the day and all cash payments should be made by means of a check (imprest system).

c. Have bank reconciliation's performed by employees who do not handle cash.

d. Decentralize the receiving of cash as much as possible.