compensating control?
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
When will a credit check approval most likely require specific authorization by the credit department?
when verifying that the current transaction does not exceed the customer’s 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
