Which of the Following Would Offer the Best Protection for a Company

question 28

Multiple Choice

Which of the following would offer the best protection for a company that wishes to prevent a reoccurrence of a previously detected "lapping" problem with trade accounts receivable?

• A)Segregate duties so that the bookkeeper in charge of the general ledger has no access to incoming mail.
• B)Segregate duties so that no employee has access to both checks from customers and currency from daily cash receipts.
• C)Have customers send payments directly to the company's depository bank.
• D)Request that customer's payment checks be made payable to the company and addressed to the treasurer.

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Definitions:

SEC

The Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry and enforcing federal securities laws.

Fraud in Securities Transactions

Illegal activities involving deceit or concealment in the buying, selling, or trading of securities, aimed at gaining a financial advantage.

SEC Regulations

Rules and standards developed and enforced by the U.S. Securities and Exchange Commission to regulate the securities industry.

Security

A financial instrument representing an ownership position, a debt relationship, or rights to ownership as represented by an option.