Which One of the Following Would the Auditor Consider to Be

question 7

Multiple Choice

Which one of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?

• A)The cashier prepares the daily deposit.
• B)The cashier makes the daily deposit at a local bank.
• C)The cashier posts the receipts to the accounts receivable subsidiary ledger.
• D)The cashier endorses the checks.

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Definitions:

Bad Debt Expense

The cost associated with accounts receivable that a company is unable to collect from its debtors.

Credit Sales

Transactions where goods or services are provided to a customer with an agreement to receive payment at a later date.

Invoice Price

The amount charged by the seller to the buyer, detailing the cost of the product or service sold.

Merchandise

Merchandise refers to the goods that a business purchases to resell at a profit.