FireballCompany requires that all documents supporting a check (purchase order, invoice, and receiving report) be canceled by punching a hole through the packet. Why is this practice required?What might happen if it were not?

FireballCompany requires that all documents supporting a check (purchase order, invoice, and receiving report) be canceled by punching a hole through the packet. Why is this practice required?What might happen if it were not?

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter3: The General Journal And The General Ledger

Section: Chapter Questions

Problem 5QY

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Concept explainers

Management Information Systems

While undertaking any business decisions, data is the most important aspect. An information system (IS) is a set of data, computing devices and management methods that support routine company operations. A management information system (MIS) is a specific subset of IS.

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Fireball
Company requires that all documents supporting a check (purchase order, invoice, and receiving report) be canceled by punching a hole through the packet. Why is this practice required?
What might happen if it were not?

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Which of the following control procedures mitigates the threat of duplicate payments? Select one: a. When an invoice is paid, the invoice and the entire voucher package should be canceled (for example marked “paid”) in a way that it cannot be submitted again. b. When evaluated receipt settlement (invoice-less system) is used, receiving reports need not be marked as paid as no invoices are generated. c. Photocopied invoices can be paid. d. Invoices should be approved for payment only when accompanied by a valid purchase order.
All of the following are examples of sales order entry system controls except? Digital signatures/written signatures Credit Limits Approving invoices before paying Training
Can you explain how the internal control of Documentation Procedure is violated in this question? after payment, bills are filed in a "paid invoice" folder.
The sales of $2,000 made to Shanaya has been posted to the Sara’s account by mistake. It happened because a customer account number was incorrectly entered into the system. Explain what internal control procedure(s) would provide protection against this threat in future?
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An employee in the receiving department keyed in a shipment from a remote terminal and inadvertently omitted the purchase order number. The best systems control to detect this error would be aa. batch total.b. completeness test.c. sequence check.d. reasonableness test.e. compatibility test.
Provide an appropriate response based on the following scenarios. Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented? Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?
What internal control or procedure(s) would provide protection against the following threats? A company is late in paying a particular invoice. Consequently, a second invoice is sent, which crosses the first invoice’s payment in the mail. The second invoice is submitted for processing and also paid. A clerical employee obtains a blank check and writes a large amount payable to a fictitious company. The employee then cashes the check A fictitious invoice is received and a check is issued to pay for goods that were never ordered or delivered A purchasing agent adds a new record to the supplier master file. The company does not exist. Subsequently, the purchasing agent submits invoices from the fake company for various cleaning services. The invoices are paid. Cash disbursement department updates account payable once payment is due.
When an audit team does not receive a response on a positive accounts receivable confirmation, auditors should do all of the following excepta. Send a second request.b. Do nothing for immaterial balances.c. Examine shipping documents.d. Examine client correspondence files.
Ledger accounts are updated through a process called posting. True False
The purpose of a checkpoint procedure is to facilitate restarting aftera. data processing errors.b. data input errors.c. the failure to have all input data ready on time.d. computer operator intervention.e. echo check failures.
Which of the following cannot be encashed but instead merely deposited? stale checkspost dated checksdishonored checkscrossed checks