question

approval of sales return prior to issuing credit memo

answer

invalid customers, invalid returns, unapproved pricing

question

separation of responsibility for authorization of customer returns from custody of inventory

answer

fictitious customers

question

SOC of inventory from accounts receivable record keeping

answer

invalid returns or omitted transactions

question

preparation of receiving reports and credit memos on pre-numbered docs

answer

omitted transactions

question

preparation of receiving report and receiving log only when products have actually been received

answer

invalid trans, omitted trans or timing issues

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question

preparation of credit memos and credit memo journal only when products have been received

answer

invalid trans, omitted trans or timing issues

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question

preparation of customer act statements

answer

wrong customer or incorrect amts

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question

matching of info on related documents before issuing credit

answer

invalid trans, incorrect amts, timing and duplicates

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question

comparison of receiving log with credit memo listing and credit memos

answer

omitted transactions, incorrect amts, wrong customers

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sales returns risks and controls – Flashcards

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