One of the Key Internal Controls to Prevent Transactions in the Sales

question 134

Multiple Choice

One of the key internal controls to prevent transactions in the sales and collection cycle to fictitious customers is to

• A)have the bank reconciliation done by someone who is independent of the treasury function.
• B)account for the integrity of the numerical sequence of sales orders.
• C)compare customer numbers entered to the customer master file.
• D)include the sales price list of all products in the computer files.

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Definitions:

Agency Agreement

A contract where one party (the agent) agrees to act on behalf of another (the principal) in business transactions.

Operation Of Law

An operation of law is a legal change that occurs automatically due to existing legal rules, rather than actions taken by the parties themselves.

Employee Status

A classification that determines if an individual is employed by a company, affecting their entitlement to employee benefits and protections under labor laws.

Independent Contractors

Individuals or entities that provide services to another entity under terms specified in a contract, not classified as employees by the hiring company.