When the store manager receives a requisition note, he issues three copies of purchase order. Two copies of these orders are sent to the vendor and one copy remains in the stores file. When the goods are received, the store manager matches the purchase order with the invoice and forwards them to accounts payable department for payment of dues. Which of the following statement best describes the internal control over the purchasing process? Inadequate control over accounts payable. Inadequate segregation of duties. Inadequate segregation of duties. Adequate internal control exists.

When the store manager receives a requisition note, he issues three copies of purchase order. Two copies of these orders are sent to the vendor and one copy remains in the stores file. When the goods are received, the store manager matches the purchase order with the invoice and forwards them to accounts payable department for payment of dues. Which of the following statement best describes the internal control over the purchasing process? Inadequate control over accounts payable. Inadequate segregation of duties. Inadequate segregation of duties. Adequate internal control exists.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 6MC: A company is trying to set up proper internal controls for their accounts payable/inventory...

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Upon reciept of requisition, the stores manager initiates a three part purchase order. To copies go to the vendor and one copy stays in the stores file. Upon reciept of the goods, the stores manager matches the purchase order with the invoice and forwards them to accounts payable for payments. which of the following statement best describe the internal control over purchasing? a. adequate the internal control exists. b. Inadequate separation of duties exists. c. Inadequate control over accounts payable exists. d. Inadequate control over the requisition pricess exists.
explain whether they are considered improper segregation of functions? a. The billig department prepares the customers, invoices and records the sale in the sales journal b. Mailroom clerk open cash receipts envelopes from customers and also prepares the remittance list. c. Accounting clerk recives journal vouchers from various departments and post togeneral ledger accounts d. The sales department approves sales credit memos as the result of production returns and forwards these to the Account Receivable department, which adjusts the customer accounts to reflect the return.
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.
Which of the following would not be a control in a sales system? a. Agreeing details from the sales order when preparing the goods to be dispatched to the customer b. Batch totals required when inputting sales invoices onto the system c. Approval of credit limits for new customers from a manager before being allowed credit d. The sales clerk alone deciding whether to give discounts or not to customers without approval
Which of the following are examples of preventive controls? Select all that apply. O account coding on purchase orders is checked by the computer using a table of valid account numbers computerized accounting system will not allow a sale to be processed if a customer has exceeded its credit limit O quarterly review of credit balances in accounts receivable for reasonableness O sales manager reviews daily shipments, total sales, and sales per unit shipped O sales invoices are priced automatically using a master pricing file
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.
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.
1. SEGREGATION OF FUNCTIONS to the AR department, which adjusts the customer Which, if any, of the following situations represents improper segregation of functions? Explain your accounts to reflect the return. answer. a. The billing department 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
which, if any of the following situations represents improper segregation of functions? Explain your answer. a. the billing department prepares the customers' invoices and records the sale in the sales journal b. The mailroom clerk opens a cash receipt envelopes from customers and also prepared the remittance risk 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.
Sales ledger control Account is known to have a debit balance. Explain, using numerical example why at certain instances the account has both debit and credit balance brought down? Construct a Purchase Ledger Control Account, using your own numerical example, with five items? Briefly discuss the role of the control accounts in the identification of missing figures in the financial statements of organizations ?
Read and analyze each of the transactions and explain whether they are considered improper segregation of functions? Explain your answer. ed from ro rata hich person The billing department prepares the customers' invoices and records the sale in the sales journal. a. b. Mailroom clerk open cash receipts envelopes from customers and also prepares the remittance list. ses Accounting clerk receives journal vouchers from various departments and post to the GL accounts. ensation C. does and 00.00 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. II
1. SEGREGATION OF FUNCTIONSWhich, if any, of the following situations representsimproper segregation of functions? Explain youranswer.a. The billing department prepares the customers’invoices and records the sale in the salesjournal.b. Mail room clerk opens cash receipts envelopesfrom customers and also prepares the remittancelist.c. Accounting clerk receives journal vouchers fromvarious departments and also posts to the GLaccounts.d. The sales department approves sales credit memosas the result of product returns and forwards these to the AR department, which adjusts the customeraccounts to reflect the return.