A high average collection period may indicate: a. Management's willingness to quickly write-off questionable receivables b. Customers are paying for purchases quickly c. A strict collection policy d. None of these

The average collection period(ACP) refers to the time gap between the credit sale date and the date…

Answered: A high average collection period may…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

Describe how prenumbered shipping papers and sales invoices may be effective controls for avoiding sales misstatements.
Why is it important for companies to analyze revenue and accounts receivable? How can these areas lend themselves to fraud when left with lack of segregation of duties, weak controls and recordkeeping delays?
TRUE or FALSE 3. All allowances to customers for returned or defective merchandise should be supported by serially numbered credit memo signed by an officer or responsible employee having no duties relating to handling cash or the maintenance of customers' ledgers. 4. The auditors should perform alternative auditing procedures on all negative confirmation requests that are not returned. 5. When it is "impossible" to confirm accounts receivable, the auditors can never issue an unqualified oinion, on the client's financial statements. 6. Inspection of notes receivable on hand should be performed concurrently with the count of cash and securities to prevent the concealment of a shortage by substitution of cash for misappropriated negotiable instruments, or vice versa. 7. A confirmation is considered documentary evidence secured from outside the organization and sent directly to the auditors. 8. The auditor needs the client's permission to send out "confirmations" 9. A customer's response…
Sam Fenton wants to ensure that sales in a retail outlet are not recorded at the wrong amount. Which preventive control will help him ensure his objective? O The signature of the goods by the warehouse receiver on a receiving report or a bill of lading. O A credit check by the credit manager. O Automatic pricing of sales invoices using a master price file. O None of the above.
Sales Discounts is a revenue account with a credit balance. True False Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Accounts often need to be adjusted because Select one: a. there are never enough accounts to record all the transactions. b. many transactions affect more than one time period. c. there are always errors made in recording transactions. d. management can’t decide what they want to report.
A serious exposure for an organization that is connnected with the revenue cycle is the loss of assets. What is the related threat and applicable contrtol procudure associated with this exposure? A. receiving unordered goods; compare to valid order B. billing errors; reconciliation of shipping documents to sales order C. shipping errors, data entry controls D. theft of inventory; documentation of all internal transfers of inventory
Master
A serious exposure in the ordering process of the expenditure cycle is increased inventory costs. What is the related threat and applicable control procedure that address this exposure? A. mistakes in counting; do not inform receiving employees about quantity ordered B. paying for items not received; requiring that all supplier invoices be matched to supporting documents C. purchasing at inflated prices; review of purchase orders D. theft of inventory; periodic physical counts of inventory and reconciliation to recorded quantities E. mistakes in posting to accounts payable; reconciliation of detailed accounts payable to the general ledger control account
Matching Type: Choose appropriate controls with the given possible frauds and errors.- You can choose multiple controls for 1 number of possible errors and controls - controls already answered from preceding number can still be answered for succeeding number.
1. Which of the following is a control procedure to address the threat of purchasing goods or services at inflated prices? A. Requiring multiple approvals for purchases B. Performing regular physical inventory counts C. Conducting vendor audits D. Implementing encryption for sensitive data 2. Which of the following is not a common error in the expenditure cycle? A. Recording the wrong purchase order number B. Recording the wrong vendor name for goods received C. Recording the wrong quantity of goods received D. Recording the wrong price for goods received 3. The primary objective of internal controls in the expenditure cycle is to: A. Ensure the accuracy and completeness of financial transactions B. Streamline the procurement process C. Minimize the cost of purchases D. Increase the speed of payment processing

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		a. Management's willingness to quickly write-off questionable receivables
		b. Customers are paying for purchases quickly
		c. A strict collection policy
		d. None of these