Final answer:
An active board of directors (A) is not a direct key control for sales and cash receipts. The key controls include adequate separation of duties, internal verification procedures, and thorough documentation and record-keeping.
Step-by-step explanation:
The key controls for sales and cash receipts are essential for ensuring the accuracy and reliability of a company's financial transactions. Among the options provided, (A) an active board of directors is not typically considered a direct control for sales and cash receipts. While an active board is crucial for overall governance and oversight, the more direct controls for this aspect of business operations are adequate separation of duties (B), internal verification procedures (C), and adequate documents and records (D). These controls are designed to prevent and detect errors or fraud within the sales and cash receipts processes.
Adequate separation of duties ensures that no single individual has control over all aspects of a transaction, which decreases the risk of errors or fraudulent activities. Internal verification procedures involve routine checks and reconciliations to confirm the accuracy of transactions and records. Adequate documents and records are essential for maintaining evidence of transactions and for subsequent auditing and verification purposes.The correct answer is A) active board of directors. An active board of directors is a key control for sales and cash receipts as it promotes accountability and oversight. The other options - B) adequate separation of duties, C) internal verification procedures, and D) adequate documents and records - are all important controls to ensure the accuracy and integrity of sales and cash receipts.