35 clerks who receive and sort the general mail. Included in the mail are envelopes containing cus- tomer checks and remittance advices, which the clerks open to verify that the checks are signed and are constant in amount with the remittance advice. The checks and remittance advices are orga- nized into batches and sent to the AR department where the AR clerk reviews them for correctness, posts to the AR sub ledger. The clerk then prepares two copies of a remittance list. One of these is filed in the department along with the remittance advice and the other is sent to the cash receipts department with the checks. Upon receipt of the checks and remittance list, the cash receipts clerk reconciles the documents and post the checks to the cash receipts journal. At the end of the day, the clerk prepares a deposit slip and sends it' along with the checks to the bank. Finally, the clerk summarizes the batch of cash receipts transaction and posts to the general ledger AR control account and the cash account. 4. SYSTEM DOCUMENTATION, RISK ANALYSIS, AND INTERNAL CONTROLS The following describes the cash receipts process for a company: The mail room staff consists of

35 clerks who receive and sort the general mail. Included in the mail are envelopes containing cus- tomer checks and remittance advices, which the clerks open to verify that the checks are signed and are constant in amount with the remittance advice. The checks and remittance advices are orga- nized into batches and sent to the AR department where the AR clerk reviews them for correctness, posts to the AR sub ledger. The clerk then prepares two copies of a remittance list. One of these is filed in the department along with the remittance advice and the other is sent to the cash receipts department with the checks. Upon receipt of the checks and remittance list, the cash receipts clerk reconciles the documents and post the checks to the cash receipts journal. At the end of the day, the clerk prepares a deposit slip and sends it' along with the checks to the bank. Finally, the clerk summarizes the batch of cash receipts transaction and posts to the general ledger AR control account and the cash account. 4. SYSTEM DOCUMENTATION, RISK ANALYSIS, AND INTERNAL CONTROLS The following describes the cash receipts process for a company: The mail room staff consists of

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter3: Ethics, Fraud, And Internal Control

Section: Chapter Questions

Problem 10P

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The following describes the cash receipts process for a company: The mail room staff consists of 35 clerks who receive and sort the general mail. Included in the mail are envelopes containing customer checks and remittance advices, which the clerks open to verify that the checks are signed and are constant in amount with the remittance advice. The checks and remittance advices are organized into batches and sent to the AR department where the AR clerk reviews them for correctness, posts to the AR sub ledger. The clerk then prepares two copies of a remittance list. One of these is filed in the department along with the remittance advice and the other is sent to the cash receipts department with the checks. Upon receipt of the checks and remittance list, the cash receipts clerk reconciles the documents and post the checks to the cash receipts journal. At the end of the day, the clerk prepares a deposit slip and sends it along with the checks to the bank. Finally, the clerk summarizes the…
Richard Palm is the accounting clerk of Olive Limited. He uses the source documents such as purchase orders, sales invoices, and suppliers’ invoices to prepare journal vouchers for general ledger entries. Each day he posts the journal vouchers to the general ledger and the related subsidiary ledgers. At the end of each month, he reconciles the subsidiary accounts to their control accounts in the general ledger to ensure they balance. Discuss the internal control weaknesses and risks associated with the above process. (maximum 300 words)
A company employs three accounts payable clerks and one treasurer. Their responsibilities are as follows: Employee Responsibility Clerk 1 Reviews vendor invoices for proper signature approval Clerk 2 Enters vendor invoices into the accounting system and verifies payment terms Clerk 3 Posts entered vendor invoices to the accounts payable ledger for payment and mails checks. Treasurer Reviews the vendor invoices and signs each check. Which of the following would indicate a weakness in the company’s internal control?a. Clerk 1 opens all of the incoming mail.b. Clerk 2 reconciles the accounts payable ledger with the general ledger monthly.c. Clerk 3 mails the checks and remittances after they have been signed.d. The treasurer uses a stamp for signing checks.
draw the system flow chart for the following narrative? Cornick, Inc. sells office products to businesses in the eastern region of the United States. Each month, the IT division at Cornick prints monthly statements and sends them to the accounts receivable (AR) department, where a clerk mails them to the customers. Cornick’s custo- mers mail their payments back to Cornick, where a clerk in AR batches the checks and sends them to the cashier. The AR clerk then uses the payment stub to enter the payments into the computer, where the AR master data are updated to record the payment
The following describes the cash receipts procedures for a medium-sized online and catalog-based retailer. Customer payments come directly to the general mail room along with other mail items. The customer payments mail constitutes about 20 percent of the total mail received each day. The mail room clerks sort through the mail, open the customer payment envelopes, remove the customer checks and remittance advices, and reconcile the two documents. The mail room supervisor then sends the reconciled checks and remittance advices to the AR clerk, who posts the amounts received to the customer AR subsidiary ledger and the cash receipts journal from her computer terminal. The AR clerk then manually prepares a remittance list of all checks received, endorses the checks “for deposit only” and sends the checks and remittance list to the treasurer. Finally, the clerk files the remittance advices in the AR department. Once the checks and remittance list arrive at the Treasury department, the…
Question 1The following describes the cash receipts process for a company: The mail room staff consists of 35 clerks who receive and sort the general mail. Included in the mail are envelopes containing customer checks and remittance advices, which the clerks open to verify that the checks are signed and are constant in amount with the remittance advice. The checks and remittance advices are organized into batches and sent to the AR department where the AR clerk reviews them for correctness, posts to the AR sub ledger. The clerk then prepares two copies of a remittance list. One of these is filed in the department along with the remittance advice and the other is sent to the cash receipts department with the checks. Upon receipt of the checks and remittance list, the cash receipts clerk reconciles the documents and post the checks to the cash receipts journal. At the end of the day, the clerk prepares a deposit slip and sends it along with the checks to the bank. Finally, the clerk…