Joe Costello Handles Cash Receipts from Customers and Also Has

question 138

Multiple Choice

Joe Costello handles cash receipts from customers and also has responsibility for issuing credit memoranda,writing off uncollectible accounts,and maintaining the accounts receivable records.When customers pay their accounts,Costello occasionally issues a credit memorandum and steals the cash received from the customer.This fraud should come to light if an employee other than Costello:

• A)Reconciles the bank statement to the accounting records.
• B)Reconciles the accounts receivable subsidiary ledger to the accounts receivable controlling account.
• C)Investigates weekly all accounts written off as uncollectible.
• D)Reconciles credit memoranda for sales returns to returned merchandise accepted by the receiving department.

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Definitions:

Prejudice

Preconceived opinion that is not based on reason or actual experience; unfavourable feelings or attitudes towards individuals based on their membership in a particular group.

Hostility

Aggressive behavior or attitudes towards others, often stemming from anger or antagonism.

Central Route

A path of persuasion that involves careful and thoughtful consideration of the arguments presented.

Peripheral Route

A method of persuasion that relies on superficial cues rather than the substantive quality of the argument.