Which of the Following Internal Control Procedures Will Most Likely

question 94

Multiple Choice

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

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Definitions:

Planning/Control Cycle

A continuous process in organizations that involves planning for future activities, executing plans, monitoring results, and making adjustments as necessary.

Strategic Plans

Comprehensive documents outlining an organization's goals and the strategies to achieve them over a specific period.

Top Management

The highest level of management in an organization, including positions like CEO, CFO, and other senior executives responsible for strategic decision-making.

Mission Statements

Concise declarations made by organizations that summarize their values, aims, and purpose, guiding internal decision-making and informing stakeholders.