95) To provide an adequate separation of functions in the accounts receivable business process, maintaining the accounts receivable control account should be the responsibility of
B) accounts receivable.
C) cash receipts.
D) general ledger.
96) A sales return occurs when a customer actually returns goods that have been shipped. The departments involved with processing this transaction up to the point of issuing a credit memo are the
A) shipping, receiving, and billing departments.
B) receiving, billing, and accounts receivable departments.
C) shipping, receiving, and credit departments.
D) receiving, credit, and billing departments.
97) The Bad Luck Fortune Cookie Company has a 360-day past-due balance of $1,300.00. After repeated attempts at collection, the account is deemed worthless. The departments involved with processing this transaction up to the point of issuing an approved write-off memo are the
A) credit and accounts receivable departments.
B) treasurer, billing, and accounts receivable departments.
C) credit, treasurer, accounts receivable, and internal audit departments.
D) credit, treasurer, cash receipts, and internal audit departments.
98) The business process used when there is an existing customer account balance is
A) accounts receivable.
C) cash sales.
D) aged trial balance.
99) In the cash-received-on-account process, the remittance list is used to post the
A) cash receipts journal.
B) accounts receivable ledger.
C) Answers A and B are both correct.
D) None of these answers is correct.
100) The amount of cash receipts for August 12 is $6,389.42. For general ledger to post this amount, it must receive
A) a journal voucher from cash receipts.
B) the deposit slip from the bank for August 12 showing $6,389.42 as a deposit.
C) a control total from accounts receivable.
D) a journal voucher from cash receipts and a control total from accounts receivable.
101) To control incoming cash from the mail and ensure an accurate accounting, the department which should have complete control over the transaction is the
B) cash receipts.
C) accounts receivable.
D) No one department should have complete control over incoming cash
102) A turnaround document that is used to enhance internal control and promote the accuracy of incoming cash receipts is the
A) journal voucher.
B) remittance advice.
C) bank deposit slip.
D) remittance list.
103) Using a lock-box system
A) expedites the cash flow for a company.
B) helps to reduce interest income lost due to delays in depositing out-of-state-checks.
C) promotes the segregation of duties because a third-party handles cash receipts.
D) All of these answers are correct.
104) A company located in Delaware has customers nationwide. The most effective system to deal with the issue of float is to
A) use one lock-box collection system located in the Midwest.
B) have customers send their remittances to the company's corporate office in Delaware.
C) use several regional lock-box systems located geographically around clusters of customers.
D) factor its accounts receivable to a collection agency.