hould be on basis of blind copy of purchase order provided not by the packing slip. The inventory subsidiary ledger is updated by the inventory control. The recording in accounts payable subsidiary ledge

hould be on basis of blind copy of purchase order provided not by the packing slip. The inventory subsidiary ledger is updated by the inventory control. The recording in accounts payable subsidiary ledge

Pkg Acc Infor Systems MS VISIO CD

10th Edition

ISBN:9781133935940

Author:Ulric J. Gelinas

Publisher:Ulric J. Gelinas

Chapter11: The Billing/accounts Receivable/cash receipts (b/ar/cr) Process

Section: Chapter Questions

Problem 5P

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Each of the below describes a procedure consistent with a strong system of internal control except… Question 7 options: The customer order department determines when a sale has occurred and should be recorded. The accounts payable department agrees purchase requisitions, purchase orders, receiving reports, and invoices prior to payment. Quantities ordered are excluded from the receiving department copy of a purchase order so receiving personnel count and inspect merchandise received. The use of remittance advices for customers' payments on accounts receivable received in the mail.
Which of the following is NOT an independent verification control?a. The shipping department verifies that the goods sent from the warehouse are correct in type and quantity.b. General ledger clerks reconcile journal vouchers that were independently prepared in various departments.c. The use of prenumbered sales orders.d. The billing department reconciles the shipping notice with the sales invoice to ensure that customers are billed for only the quantities shipped.
In response to the six primary physical control weaknesses that have been identified, make recommendations (one for each bullet). pls give other answers beside on the internet. The purchase transaction should not be authorized by the purchases. The inspection of receiving items should be on basis of blind copy of purchase order provided not by the packing slip. The inventory subsidiary ledger is updated by the inventory control. The recording in accounts payable subsidiary ledger is without the supporting documents as recorded only on invoice receiving. The journal vouchers and summary reports from accounts payable department, cash disbursement system and inventory control should be received by general ledger department. The cash disbursements journal and check register are not in use.
A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure? Group of answer choices 1.The person in accounts payable should generate the purchase order. 2.The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received. 3.No changes would be made since the person paying the bills is different from the person ordering the inventory. 4.The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.
Tests of Controls and Errors/Frauds. The following four questions are taken from an internal control questionnaire. For each question, state (a) one test of controls procedure you could use to find out whether the control technique was really functioning and (b) what error or fraud could occur if the question were answered “no” or if you found the control was not effective.1. Are blank sales invoices available only to authorized personnel?2. Are sales invoices prenumbered and are all numbers accounted for?3. Are sales invoices checked for the accuracy of quantities billed? Prices used? Mathematical calculations?4. Are the duties of the accounts receivable bookkeeper separate from all cash functions?5. Are customer accounts regularly balanced with the control account?6. Do customers receive a monthly statement even when the ending balance on the account is zero?
Payable ICQ Items: Assertions, Tests of Controls, and Possible Errors or Frauds. Following is a selection of items from internal control questionnaires.1. Are purchase orders above a certain level approved by an officer?2. Are the quantity and quality of goods received determined at the time of receipt by receiving personnel independent of the purchasing department?3. Are vendors’ invoices matched against purchase orders and receiving reports before a liability is recorded?4. Are journal entries authorized at appropriate levels?Required:For each preceding item:a. Identify the management assertion to which it applies.b. Specify one test of controls auditors could use to determine whether the control was operating effectively.c. Give an example of an error or fraud that could occur if the control were absent or ineffective.d. Write a substantive procedure that could find errors or frauds that could result from the absence or ineffectiveness of the control items.
An internal control questionnaire indicates that an approved receiving report is required to accompany every check request for the payment of merchandise. Which of the following procedures provides the best evidence for operating effectiveness? Question 34 options: Select and examine receiving reports and test whether the related purchase orders are dated no later than the receiving reports. Select and examine canceled checks and test whether the related receiving reports are dated no later than the checks. Select and examine receiving reports and test whether the related purchase orders are dated no earlier than the receiving reports. Select and examine canceled checks and test whether the related receiving reports are dated no earlier than the checks.
As the auditor of Sample Limited you note the following matters relating to the internal control of its sales system. i) The sales department accepts order without first checking the inventory level with the warehouse. ii) Goods are dispatched to customers without recording customer's signatures as proof of receipt of goods. iii) Orders of goods placed by customers are properly recorded but they are not forwarded timely to the dispatch department for fulfilling the order. a) For each of the above deficiencies, identify the possible impact on the company's operation and recommend a control to address it. b) Explain why an auditor cannot perform only test of control in an audit.
As the auditor of Sample Limited you note the following matters relating to the internal control of its sales system. i) The sales department accepts order without first checking the inventory level with the warchouse, ii) Goods are dispatched to customers without recording customer's signatures as proof of receipt of goods. iii) Orders of goods placed by customers are properly recorded but they are not forwarded timely to the dispatch department for fulfilling the order. For each of the above deficiencies, identify the possible impact on the company's operation and recommend a control to address it. Explain why an auditor cannot perform only test of control in an audit.
Determine whether each procedure described below is an internal control strength or weakness; then identify the internal control principle violated or followed for each procedure. 1. The same employee requests, records, and makes payment for purchases of inventory. 2. The company saves money by having employees involved in operations perform the only review of internal controls. 3. Time is saved by not updating records for use of supplies. 4. The recordkeeper is not allowed to write checks or initiate EFTs. 5. Each salesclerk is in charge of her own cash drawer.
Which, if any,of the followingsituations represent improper segregationof functions? Explain your answer. a. The billing deparment prepares the customers' invoices and records the sale in the sales journal. b. Mail room clerk opens cash receipts envelopes from customers and also prepares the remittance list. c. Accounting clerk receives journal vouchers from various departments and also posts to the GL accounts. d. The sales department approves sales credit memos as the result of product returns and forwards these to the AR department, which adjusts the customer accounts to reflect the return.
Identify control weakness and potential internal controls to be put in place regarding the scenario provided below: Leslie Epstein, an employee of XXX Company, prepares journal vouchers for general ledger entries. Because of the large number of voided journal vouchers caused by errors, the journal vouchers are not prenumbered by the printer; rather, Leslie numbers them as she prepares each journal voucher. She does, however, keep a log of all journal vouchers written so that she does not assign the same number to two journal vouchers. Biweekly, Leslie posts the journal vouchers to the general ledger and any necessary subsidiary accounts. Bimonthly, she reconciles the subsidiary accounts to their control accounts in the general ledger and makes sure the general ledger accounts balance. Format: Weakness Control