1. Which of the following is NOT an independent verification control?
a. The shipping department verifies that the goods sent from the warehouse are correct in type and quantity.
b. General ledger clerks reconcile journal vouchers that were independently prepared in various departments.
c. The use of pre numbered sales orders.
d. The billing department reconciles the shipping notice with the sales invoice to ensure that customers are billed for only the quantities shipped.
2. Which function or department below records the decrease in inventory due to a sale?
a. warehouse
b. sales department
c. billing department
d. inventory control
3. Which situation indicates a weak internal control structure?
a. the AR clerk authorizes the write off of bad debts
b. the record keeping clerk maintains both AR and AP subsidiary ledgers
c. the inventory control clerk authorizes inventory purchases
d. the AR clerk prepares customer statements every month
4. The bill of lading is prepared by the
a. sales clerk.
b. warehouse clerk.
c. shipping clerk.
d. billing clerk.
5. Which of following functions should be segregated?
a. opening the mail and recording cash receipts in the journal
b. authorizing credit and determining reorder quantities
c. shipping goods and preparing the bill of lading
d. providing information on inventory levels and reconciling the bank statement