Immediately Upon Receiving Checks from Customers in the Mail, a Responsible

question 62

Multiple Choice

Immediately upon receiving checks from customers in the mail, a responsible employee working in an environment of adequate internal control should prepare a listing of receipts and forward it to the company's cashier.A copy of this cash receipts listing should also be sent to the company's

• A)Treasurer for comparison with the monthly bank statement
• B)Internal auditor for investigation of any unusual transactions
• C)Accounts receivable clerk for updating of the accounts receivable subsidiary ledger
• D)Bank for comparison with deposit slips

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Definitions:

Income Effect

The variation in income for a person or an economy and its impact on the demand for a specific good or service.

Perfect Substitutes

Goods that can serve the same purpose perfectly, where consumers are indifferent between them and will select based on price.

Giffen Good

A product that paradoxically sees an increase in demand as its price increases, violating the basic law of demand due to the income effect overshadowing the substitution effect.

Inferior Good

A type of good whose demand decreases as the income of consumers increases, opposite of a normal good.