Question

Which of the following control activities may prevent the failure to bill customers for some shipments?

A) Each shipment should be supported by a prenumbered sales invoice that is accounted for.
B) Each sales order should be approved by authorized personnel.
C) Sales journal entries should be reconciled to daily sales summaries.
D) Each sales invoice should be supported by a shipping document.

Answer 1

Control activities that may prevent failure to bill customers include prenumbered sales invoices, approval of sales orders by authorized personnel, and having shipping documents for each sales invoice.

Step-by-step explanation:

Option A) Each shipment should be supported by a prenumbered sales invoice that is accounted for. This control activity ensures that all shipments are properly documented, and any missing or unaccounted invoices can be easily identified.

Option B) Each sales order should be approved by authorized personnel. By having authorized personnel review and approve sales orders, any potential errors or discrepancies can be caught before billing the customer.

Option D) Each sales invoice should be supported by a shipping document. This control activity links the sales invoice to the actual shipment, ensuring that no invoices are generated without corresponding shipments.