Question 1 Which type of control is considered a compensating control? segregation of duties access control supervision accounting records Question 2 In regard to the bill of lading which of the following is false? The shipping clerk normally prepares the bill of lading It is a formal contract between the seller and the shipping company It establishes legal ownership and responsibility for assets in transit It is completed before the packing slip and shipping notice Question 3 The bill of lading is prepared by the sales clerk warehouse clerk shipping clerk billing clerk Question 4 Good internal controls in the revenue cycle should ensure all of the following except all sales are profitable all sales are recorded credit is authorized inventory to be shipped is not stolen Question 5 Which of following functions should be segregated? opening the mail and recording cash receipts in the journal authorizing credit and determining reorder quantities shipping goods and preparing the bill of lading providing information on inventory levels and reconciling the bank statement Question 6 Which situation indicates a weak internal control structure? the AR clerk authorizes the write off of bad debts the record- keeping clerk maintains both AR and AP subsidiary ledgers the inventory control clerk authorizes inventory purchases the AR clerk prepares customer statements every month Question 7 W
hen will a credit check approval most likely require specific authorization by the credit department? when verifying that the current transaction does not exceed the customerΒs credit limit when verifying that the current transaction is with a valid customer when a valid customer places a materially large order when a valid customer returns goods Question 8 Which of the following is not one of the three rules that govern segregation of duties? All transactions should be independently verified to verify the completeness and accuracy of the transaction Transaction authorization should be separate from transaction processing Asset custody should be separate from the task of asset record keeping The organization should be structured so that the perpetration of a fraud requires collusion between two or more individuals Question 9 Which situation indicates a weak internal control structure? the mailroom clerk authorizes credit memos the record keeping clerk maintains both accounts receivable and accounts payable subsidiary ledgers the warehouse clerk obtains a signature before releasing goods for shipment the accounts receivable clerk prepares customer statements every month Question 10 The credit department prepares credit memos when goods are returned approves credits to accounts receivable when payments are received authorizes the granting of credit to customers none of the above