Options are:
A) Establish a lockbox arrangement with a bank.
B) Have customers send a remittance advice with their payment.
C) Have mailroom personnel prepare a remittance list which can be forwarded to accounts receivable.
D) all of the above
Answer:
Option D All of the above
Explanation:
The reason is that the segregation of duties breaks down a task and assign it to different people and authorize them to collect and record the facts.
So their are number of internal controls which are listed as options and are correct because:
Option A The lockbox arrangement helps the customers to deposit their money in their supplier's bank account by using the mailing facility of the bank.
Option B
The customer must send the remittance advice with their payment to suppliers so that the company knows whether or not the customer has paid or not and how much they have paid.
Option C
The mailroom personel sends the draft to the accounts department as well so that the right amount remittance is generated and sent alongwith the invoice to the customers.
All the options are correct so the right option is D.
