Which of the following internal controls would be most likely to deter the lapping of collections from customers?
A)Supervisory comparison of the daily cash summary with the sum of the cash receipts journal entries.
B)Segregation of duties between receiving cash and posting the accounts receivable ledger.
C)Authorisation of write-offs of uncollectible accounts by a supervisor independent of the credit approval function.
D)Independent internal verification of dates of entry in the cash receipts journal with dates of daily cash summaries.

Question

Quizplus · Accepted Answer

Segregation of duties between receiving cash and posting the accounts receivable ledger would be most likely to deter the lapping of collections from customers. This is because lapping involves a delay in posting customer payments to cover up an earlier theft. If the employee receiving cash does not also have responsibility for posting to the accounts receivable ledger, it is harder to cover up the theft through lapping. The other options listed are all important internal controls, but are less likely to deter lapping specifically.

Which of the Following Internal Controls Would Be Most Likely