Segregation of Duties Controls Dictates That the Collection and Recording

question 50

Multiple Choice

Segregation of duties controls dictates that the collection and recording functions be kept separate from each other.However,the accounts receivable department needs to know when customers pay their invoices.What is a solution to this potential internal control problem?

• A)Establish a lockbox arrangement with a bank.
• B)Have customers send a remittance advice with their payment.
• C)Have mailroom personnel prepare a remittance list which can be forwarded to accounts receivable.
• D)all of the above

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Definitions:

Internal Controls

Internal controls are processes and procedures implemented by a business to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.