During a Review of a Small Business Entity's Internal Control

question 69

Multiple Choice

During a review of a small business entity's internal control system, the auditor discovered that the accounts receivable clerk approves credit memos and has access to cash. Which of the following controls would be most effective in offsetting this weakness?

• A)The owner reviews errors in billings to customers and postings to the subsidiary ledger.
• B)A controller receives the monthly bank statement directly and reconciles the checking accounts.
• C)The owner reviews credit memos before they are recorded.
• D)The controller reconciles the total of the detailed accounts receivable accounts to the amount shown in the ledger.

Comprehend how production levels affect operating income under both costing methods.

Recognize the components and significance of contribution margin in decision-making.

Identify the relevance and application of variable costing in service firms.

Understand the concept of controllable costs and their impact on managerial decision-making.

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Definitions:

Evidence-Informed Practices

Methods and interventions that are grounded in and guided by reliable and updated research evidence.

Nurse Connect

A term that could refer to a platform or service designed to facilitate communication and collaboration among nurses.

Nurse ONE

A reference to a primary, key nurse in a healthcare setting, emphasizing their first-point role or singular importance.

ICNP

The International Classification for Nursing Practice, a standardized vocabulary that allows nurses to describe and report their work across global healthcare environments.