Which One of the Following Internal Control Procedures Would Most

question 25

Multiple Choice

Which one of the following internal control procedures would most likely prevent the concealment of a cash shortage resulting from the improper write- off of a trade account receivable?

• A) Write- offs must be approved by the cashier who is in a position to know if the receivables have, in fact, been collected.
• B) Write- offs must be approved by a responsible officer after review of credit department recommendations and supporting evidence.
• C) Write- offs must be authorised by company field sales employees who are in a position to determine the financial standing of the customers.
• D) Write- offs must be supported by an aging schedule showing that only receivables overdue several months have been written off.

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Definitions:

Intense and Long-lasting

Describing emotions, experiences, or processes that are powerful and extend over a considerable period of time.

Subjective Evaluation

The process of judging or assessing something based on personal feelings, tastes, or opinions rather than objective criteria.

Sentiment

A complex combination of feelings and opinions as a response to a situation, person, or object.

Affect

A term used in psychology to describe the experience of feeling or emotion.