Which of the following is an example of exercising internal control over receivables?
A) separating cash collection and credit approval duties
B) extending credit to all customers who apply for credit
C) combining the duties of the credit and accounting departments
D) allowing credit department employees to collect cash from customers

Question

Quizplus · Accepted Answer

Separating cash collection and credit approval duties is an example of exercising internal control over receivables because it helps to ensure that there is a system of checks and balances in place. By separating these duties, the risk of fraud, errors and irregularities is reduced. Allowing credit department employees to collect cash from customers, combining the duties of the credit and accounting departments, and extending credit to all customers who apply for credit are all examples of weak internal controls over receivables.

Which of the Following Is an Example of Exercising Internal