The Cashier Diverted Cash Received Over the Counter from a Customer

question 108

Multiple Choice

The cashier diverted cash received over the counter from a customer to his own use and wrote off the receivable as a bad debt.Select the control that should have prevented the error.

• A) Journal entries are approved by a responsible official.
• B) Receipts are given directly to the cashier by the person who opens the mail.
• C) Remittance advices, letters, and envelopes that accompany receipts are separated and given directly to the accounting department.
• D) Aging schedules of accounts receivable are prepared periodically and reviewed by a responsible official.

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Definitions:

Total Utility

The total satisfaction or benefit that a consumer derives from consuming a certain quantity of goods and services.

Marginal Utility

The change in total satisfaction or pleasure derived from consuming one more unit of a good or service.

Total Utility

The overall satisfaction or benefit a customer receives from consuming a particular good or service.

Marginal Utility

The increased happiness or usefulness gained by consuming an additional unit of a good or service.