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:

Labour Legislation

Laws and regulations governing the rights and duties of workers, employers, and trade unions, aimed at establishing fair workplaces.

Pay Equity

A principle that emphasizes equal salary for jobs of equal value within an organization, aiming to eliminate discrimination based on gender, race, or other unrelated job performance factors.

Executive Bonuses

Additional compensation given to executives, often tied to performance metrics, company profitability, or achievement of specific targets.

High-risk Executive Behaviours

Actions or decisions by top management that carry a significant chance of negative consequences for the organization or its stakeholders.