When Certain Customers Made Cash Payments to Reduce Their Accounts

question 106

Multiple Choice

When certain customers made cash payments to reduce their accounts receivable,the bookkeeper embezzled the cash and wrote off the accounts as uncollectible.Which control procedure would most likely prevent this irregularity?

• A)segregation of duties
• B)accounting records
• C)accounting system
• D)access controls

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Definitions:

SEC

The Securities and Exchange Commission (SEC) is a U.S. government agency that oversees securities transactions, activities of financial professionals and mutual fund trading to prevent fraud and intentional deception.

AICPA

The American Institute of Certified Public Accountants, a professional organization for Certified Public Accountants (CPAs) in the United States.

Limited Liability Company

A business structure in the United States that provides its owners with limited liability while allowing them to enjoy the tax and operational flexibility of a partnership.

Business Organizations

Formal entities set up for the purpose of conducting trade or providing services, following a particular operating structure and goals.