Credit is granted by a credit department.Once shipment occurs and is recorded in the sales journal, all shipping documents are electronically marked “recorded” by the accounting staff.Sales returns are presented to a sales department clerk, who prepares a prenumbered receiving report.Cash receipts received in the mail are received by a secretary with no record-keeping responsibility.Cash receipts received in the mail are forwarded unopened with remittance advices to accounting.The cash receipts journal is prepared by the treasurer’s department.Cash is deposited weekly.Statements are sent monthly to customers.Write-offs of accounts receivable are approved by the controller.The bank reconciliation is prepared by individuals independent of cash receipts record keeping. For each of the preceding 10 items, indicate whether the item represents aninternal control strength for the sales and collection cycle.internal control deficiency for the sales and collection cycle.For each item that you answered (A), indicate the transaction-related audit objective(s) to which the control relates.For each item that you answered (B), indicate the nature of the deficiency

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Answered: Credit is granted by a credit…

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter2: Introduction To Transaction Processing

Section: Chapter Questions

Problem 19P

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Credit is granted by a credit department.
Once shipment occurs and is recorded in the sales journal, all shipping documents are electronically marked “recorded” by the accounting staff.
Sales returns are presented to a sales department clerk, who prepares a prenumbered receiving report.
Cash receipts received in the mail are received by a secretary with no record-keeping responsibility.
Cash receipts received in the mail are forwarded unopened with remittance advices to accounting.
The cash receipts journal is prepared by the treasurer’s department.
Cash is deposited weekly.
Statements are sent monthly to customers.
Write-offs of accounts receivable are approved by the controller.
The bank reconciliation is prepared by individuals independent of cash receipts record keeping.

For each of the preceding 10 items, indicate whether the item represents an
1. internal control strength for the sales and collection cycle.
2. internal control deficiency for the sales and collection cycle.
For each item that you answered (A), indicate the transaction-related audit objective(s) to which the control relates.

For each item that you answered (B), indicate the nature of the deficiency

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