Question

Immediately upon receiving checks from customers in the mail, a responsible employee working in an environment of adequate internal control should prepare a listing of receipts and forward it to the company's cashier. A copy of this cash receipts listing should also be sent to the company's:

A. Treasurer for comparison with the monthly bank statement.
B. Internal auditor for investigation of any unusual transactions.
C. Accounts receivable clerk for updating of the accounts receivable subsidiary ledger.
D. Bank for comparison with deposit slips.

Answer 1

In an adequate internal control environment, the cash receipts listing prepared after receiving checks from customers should be sent to the Accounts receivable clerk for updating the accounts receivable subsidiary ledger.

Step-by-step explanation:

Immediately upon receiving checks from customers in the mail, a responsible employee in a setting with adequate internal control should prepare a listing of receipts and forward it to the company's cashier. Additionally, a copy of this cash receipts listing should be sent to the company's Accounts receivable clerk for updating of the accounts receivable subsidiary ledger.

This step is essential for maintaining accurate records of customer payments and ensuring that the company's financial statements accurately reflect the outstanding balances owed by customers. It is also important for balancing your checkbook and keeping tabs on your cash flow to avoid overdraft and insufficient funds fees.