The Receiving Clerk at Wattana Technologies Examines Incoming Shipments and Reconciles

question 98

Multiple Choice

The receiving clerk at Wattana Technologies examines incoming shipments and reconciles their contents with the relevant purchase orders.A receiving report is then sent to accounts receivable and the vendor's invoice is approved for payment.Which of the following would correct control weaknesses related to these activities?

• A)Accounts payable should reconcile the purchase order and the receiving report.
• B)The invoice should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled.
• C)Invoices,purchase orders,and receiving reports should be reconciled by the receiving clerk.
• D)Controls are adequate under the current system.

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Definitions:

Bank Reconciliation

Bank reconciliation is the process of comparing and matching figures from the accounting records against those shown on a bank statement to ensure they are in agreement.

NSF Check

A check that cannot be processed because the account it's drawn on does not have sufficient funds.

Outstanding Checks

Checks that have been written and recorded in the paying entity's accounting system but have not yet been cashed or cleared by the bank.

Purchase Requisitions

Purchase requisitions are formal requests made within an organization to purchase goods or services, typically before a purchase order is created and allocated the necessary budget.